Toronto’s housing market started to slow in April after months of frenetic activity, with sales and the average price falling from March.
There were 13,663 home resales in the Toronto region last month, which was a record for the month of April but 13 per cent below March, according to the Toronto Regional Real Estate Board, or TRREB.
Meanwhile, the average selling price was $1,090,992 in April, down 1 per cent over the previous month. The home price index, which corrects for expensive purchases, was $1,025,200, which was 2 per cent higher over March but that pace of growth was lower than the first few months of the year.
“Things haven’t been as nutty,” said Scott Ingram, sales representative with Century 21 Regal Realty Inc. “Some of the demand has already been satisfied. I think demand has peaked.”
Compared with last year when the pandemic shut down most activity, April sales and prices were significantly higher. More homeowners have been trying to take advantage of the high selling prices and are putting their properties up for sale. In March, the flood of new listings was not enough to meet demand. But in April, competition started to wane.
“We may be starting to exhaust the pool of potential buyers within the existing Greater Toronto Area population,” TRREB president Lisa Patel said.
There are other signs that the country’s overheated housing market has started to ease. Mr. Ingram and other realtors say properties are fetching fewer offers. Instead of seeing more than a dozen bids on a house, some are receiving fewer than 10 offers. In some cases, realtors reported no offers for certain suburban properties.
“This was unheard of one month ago,” said Anthony Anichini, a sales representative with Royal LePage Premium One Realty.
Still, in the Toronto suburbs to the north, east and west, the home price index was up in the double digits year-over-year. The selling price of a typical detached house in the suburbs is closing in on Toronto, the second-priciest real estate market in the country. But in Simcoe region, north of the city, the price index was essentially flat from March to April compared with the previous months.
It’s a similar story in the Fraser Valley in B.C., which also had record sales in April but fewer multiple offers as well as fewer unconditional offers. However, the price index for a detached house continued to climb, spiking to $1,293,300 in April, a 4.5-per-cent increase over March. In the Vancouver region, the index reached $1,152,600 last month.
Since the pandemic started, the suburbs, smaller cities and rural areas have become popular destination as homebuyers sought more room for work and entertainment. Prices in regions outside of the major urban centres increased at a faster pace. In some areas such as Milton, Ont., the value of a typical detached house jumped by $100,000 in the first few months of the year.
Economists have been calling for measures to calm the market after months of surging sales and rapidly rising home prices. Small cities such as Tillsonburg, Cambridge and Guelph in Ontario and Chilliwack in B.C. have never experienced a market this hot. The Canadian bank regulator has introduced tougher borrowing requirements and Ottawa has proposed taxing foreigners who own empty homes.
But those two policies, which have not gone into effect, are not expected to have much of an impact.
Condos in the city of Toronto, which were the only type of property to lose value during the pandemic, continued to rebound. The average selling price reached $727,137, the highest level since prior to the pandemic. “We are back in a hotter condo market,” said Zahra Marani, co-founder of Marani Law LLP, which specializes in real estate and private lending.
TRREB’s chief market analyst Jason Mercer said the pace of price growth could “moderate in the coming months.” But he said the overall trend is up, especially given that borders are expected to open when the pandemic subsides and Ottawa has increased immigration targets to offset last year’s shortfall.