A Calm July: What’s Happening In The Market?

Market conditions in the Greater Toronto Area (GTA) have been moving towards a more balanced state throughout the summer, and July was no exception. Compared to last year at the same time, buyers have found themselves with more options in the market, leading to a more moderate rate of annual growth.

The Toronto Real Estate Board (TRREB) MLS System reported 4,912 home sales in July 2022, a 47% decrease compared to the same time last year. This is an impact of both the notable increases in lending rates as well as regular seasonal sales trends. The number of listings was similarly down compared to July 2021, however only by about 4%.

With many buyers postponing purchases, the annual average selling price was up by about 1.2% year over year, from $1,061,724 to $1,074,754. The highest growth was seen in the condominium and townhouse market segments – 6.9% and 6.3% respectively – as higher borrowing costs have turned buyers to these more affordable home types.

While there has been a shift in consumer sentiment due to rate hikes, the GTA population will continue to grow with tight labour market conditions, and market fundamentals still remain strong. TRREB Chief Market Analyst Jason Mercer has stated that “TRREB has put realistic solutions on the table to address the existing housing affordability challenges. With savings high and unemployment rate still low, home buyers will eventually account for higher borrowing costs. When they do, we want to have an adequate pipeline of supply in place or market conditions will tighten up again.”

TRREB President Kevin Crigger is calling on the federal government to ensure homeowners maintain confidence that they will be able to stay in their homes despite rising borrowing costs, including reviewing the OSFI stress tests and exploring longer amortization periods on renewals and switches.

There is no doubt that transacting in Real Estate has certainly transformed these last few years. We have had the pleasure of servicing our clients through these unprecedented times, and will continue to do so as the real estate market climate changes. Despite the recent cooling of sales, the Toronto Real Estate Market still remains one of the strongest markets in the world, and we can offer our guidance and expertise to help you make the next real estate move that is right for you and find ways to take advantage of the current market. Contact us today for a no-obligation discussion on how we can help you throughout your real estate journey.