What to know
- Canadian home sales rose 5.5 per cent month-over-month in May, marking the first meaningful increase in market activity this year.
- The GTA saw sales increase 6.3 per cent from a year ago, while the average home price fell 4.6 per cent to roughly $1.07 million.
- One expert says buyers are returning to the market as prices remain lower and inventory remains plentiful, offering more opportunities to negotiate and compare options.
- Toronto buyers currently have more choice than usual, with new listings continuing to outpace sales in many parts of the city, including the east, west and central regions.
- While conditions still favour buyers, rising sales and declining inventory could eventually put upward pressure on prices, prompting the expert to warn against waiting too long to enter the market.
A recent report by the Canadian Real Estate Association (CREA) recorded the country’s first meaningful increase this year, and one expert says buyers could see ideal conditions, with lower prices and more property options.
For the last few months, Canada’s real estate market has seen a slow period, with buyers remaining on the sidelines amid global economic uncertainty.
Read More
But for the first time in a year, home sales have finally started picking up across the country, with a new CREA report suggesting a 5.5 per cent month-over-month increase in sales recorded over Canadian MLS Systems in May.
The numbers are largely influenced by sales increase in larger markets across the country, including Ontario and British Columbia, where buyer interest appears to be strong.
In the GTA, the average home price dropped 4.6 per cent, from $1,120,716 a year ago to $1,069,700 last May.
Meanwhile, sales increased 6.3 per cent in the same period, with 6,583 recorded in May, at the same time that listings dropped 18.9 per cent from last year at this time.
What could be driving the increase?
Brittany Kostov, Senior Director of Sales and Agent Programs at Zoocasa, tells Now Toronto that although an increase in sales has finally been recorded, the market is still on the buyer’s side.
This means that the amount of listings available in comparison to buyer’s interest indicates that buyers still have room to choose and negotiate prices and conditions.
However, this is the first significant increase registered this year, and also represents a growth from levels seen since last year at this time. In the meantime, average prices have been going down.
Kostov said buyers might now be choosing to jump in since conditions seem more stable, with an abundance of listings to choose from combined with cheaper prices.
“It’s encouraging the confidence for those, especially first-time loan buyers, to step away from the sidelines and look at this opportunity of, ‘Okay, sales are increasing, new listings have declined…It sounds like it’s the right conditions for us now,’” she said.
On top of that, the expert said the arrival of summer might also be a deciding factor. The real-estate market tends to slow down during the colder months, and with this summer appearing to be delayed, the summer heat also took longer to hit.
“We felt that so immensely in January, February when we were hit storm after storm, especially, it was almost this very much delayed spring market, and I think that currently we are in this this opportunity where sellers are really trying to take advantage of the buyers that are actually saying, ‘Hey, no more storms, let’s get out,’” she added.
What does this mean for Toronto buyers?
According to Kostov, the May report also revealed that new listings are outnumbering sales in Toronto, especially in the West, central, and East areas of the city.
For buyers, this abundance of listings combined with smaller prices translates into an ideal opportunity to jump in. Under these conditions, the expert said they now have “breathing room” to compare housing options and prices and make more confident decisions when it comes to buying.
In addition, Kostov said there is a greater opportunity for first-time homebuyers looking to get their first condo in the city, with apartments in the east-end of Toronto about 16 per cent cheaper right now than the average home prices.
“If their priority is affordability, they could look east, and if it’s convenience and they’re looking central, or maybe if they’re looking for that balance of both, which can be presented in the west,” she added.
Will prices go up?
With sales now picking up, Kosov said it’s possible that prices might also increase sometime soon. However, whether that will actually happen and when it might happen is still uncertain, and can’t be defined solely by the sudden pickup in sales.
Overall, the expert said she would recommend buyers to not wait for prices to go down further, as there is the risk the market could turn around and prices could go up again.
“With inventory shrinking and sales rising. These are the conditions that tighten markets and push those prices up, so buyers who wait, who do wait, may find themselves with fewer options and more competition, and the window of relative calm may not stay open much longer,” she added.
