July 15, 2022 | Market Update
As we round out the second quarter of 2022, higher borrowing costs continue to impact the Greater Toronto Area’s (GTA) housing market. Seasonally, June tends to have a lower number of transactions than May, and this year we saw the same trend, with the number of total sales at 6,474, a 41% decrease compared to June of 2021. This decrease is also a result of the Bank of Canada’s rate tightening cycle.
The number of transactions year-over-year was down, however the number of new listings remained relatively stable, moving the market to a more balanced state, as well as more moderately paced growth. The average sale price in June of 2022 was $1,146,254, a 5.3% increase compared to June of 2021. The MLS Home Price Index Composite benchmark was up by 17.9% year-over-year. However, on a monthly basis, prices trended downward, with the biggest decreases in the detached and semi-detached markets.
The recent rate hikes means many buyers are putting their decision to purchase on hold, and are instead waiting for prices to bottom out. However, given that the majority of households aren’t in a position where they need to sell their home, we may see sellers similarly put their listings on hold. If the number of listings trend downward, this could cause market conditions to again tighten. Once prices stabilize and buyers adjust to the higher cost of borrowing, housing market activity in the GTA should again rise.
TRREB CEO John DiMichele predicts that housing demand will continue to remain strong over the long-term, despite the impact of rate hikes due to high employment coupled with record-breaking growth in immigration.
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.