Home sales across the GTA continue to rise, but average prices remained unchanged
While home sales across the Greater Toronto Area spiked year-over-year in February, prices were largely treading water, according to the latest Toronto Regional Real Estate Board report.
Jason Mercer, TRREB chief market analyst, believes this points to buyers’ seeking more modest homes amid high inflation rates and economic uncertainty.
For example, he says a family wanting a detached home before inflation began to climb in 2022 could now be looking at a semi-detached or townhome instead, or shopping around for property in a more price-friendly part of the GTA.
“So while sales are up,” said Mercer, “some households may be purchasing a less expensive home than they originally intended.”
In February, 5,607 homes were sold across the GTA — a rise of 17.9 per cent from February 2023. However, the average sale price for February 2024 was $1,108,720, an increase of only 1.1 per cent compared to the same month last year.
The leap year also appears to have had a marked effect on the increase in sales, something Mercer says is not uncommon for a month with an extra business day. Accounting for the leap year effect, sales were actually up 12.3 per cent year-over-year.
“The increase that we saw this past February compared to 2023 was substantial, whether you’re taking into account the leap day or not,” said Mercer.
“On a working day, there’s hundreds of sales that will be reported through the system, so it makes a big difference if you pick up an added day.”
Demand has begun to heat up for homes across the GTA ahead of the spring real estate market — typically the biggest boom in sales for the year.
Sales of semi-detached homes saw the biggest change in demand within Toronto compared to February 2024, with a 26.6 per cent year-over-year change. Townhomes garnered the most significant swell in popularity, with a 26.5 per cent rise in the suburbs and a 24.8 per cent hike overall.
While detached homes are typically the most popular — and expensive — type of homes on offer, in Toronto they saw the biggest drop in average price while demand did not outpace the other types of homes.
Mercer says it’s too early to say if this unusual activity regarding detached homes is indicative of a trend, but said he “wouldn’t necessarily” call it a fluke.
“We’re going to benefit from a lot more home sales as we move through the spring,” he said, “so that will give us a better sense as to where we’re heading on a pricing basis, especially when we’re breaking it down by different home types.”
So far, there have been about 1,000 more sales each in January and February 2024, compared to the same months in 2023.
This year, Mercer estimates that GTA home sales will reach 77,000, which would be an increase from about 65,000 sales in 2023. However, that would still be far below the 10-year average of 92,000 — part of a “multi-year recovery” that Mercer says is now on the rise — but not back to the record sales seen in 2021.
“Homebuyers initially take a bit of a step back and sort of reassess where they are in the marketplace,” he says, in times of high interest rates. “That takes time … A lot of people have gone through that calculus, and they’re starting to move back into the market.”
This article was first reported by The Star
