Insights into the Resurgent Greater Toronto Area Real Estate Market
The Greater Toronto Area (GTA) real estate market is showing signs of resurgence, as reported by the Building Industry and Land Development Association (BILD). After a challenging period, the market experienced a significant boost in May, marking the first year-over-year increase in over a year. In this article, we will delve into the latest trends in the GTA real estate market, including rising single-family home sales, cooling condo prices, inventory levels, and market balance.
Condominium Apartment Sales See Moderate Decline:
Within the new home market, condominium apartments, which include low, medium, and high-rise buildings, stacked townhouses, and lofts, accounted for 1,976 units sold in May. While this figure showed a slight decrease of three percent compared to May 2022, it remained 14 percent below the 10-year average. This indicates a cooling off from previous years but still highlights a steady demand for condo living in the GTA.
Single-Family Home Sales Skyrocket:
In contrast to the decline in condo sales, the GTA's single-family home market experienced a notable uptick in May. There were 1,133 single-family home sales, marking an impressive increase of 123 percent year-over-year. Despite this growth, single-family home sales still fell three percent below the 10-year average. This surge in demand for single-family homes suggests a shift in preferences among GTA homebuyers.
Replenished Supply and Softened Prices Fuel Market Recovery:
According to Edward Jegg, research manager with Altus Group, builders have been replenishing supply, and benchmark prices have softened. The benchmark price for new condominium apartments dropped by 6.7 percent over the past year, amounting to $1.1 million. Similarly, the benchmark price for new single-family homes decreased by 4.3 percent, averaging at $1.7 million. These softened prices may have contributed to the heightened market activity as affordability improved for prospective buyers.
Inventory Levels and Market Balance:
In May, the total new home remaining inventory stood at 15,346 units, encompassing preconstruction projects, projects under construction, and completed buildings. Within this inventory, 13,867 units were condominium apartments, thanks to the opening of 13 high-rise projects. The remaining inventory for single-family homes accounted for 1,479 units. These inventory levels equate to approximately 13 months' worth of inventory for condominium apartments and 4.5 months' worth of inventory for single-family homes.
The GTA's real estate market has shown signs of recovery, with rising single-family home sales and softened condo prices. While the condo market has cooled off compared to previous years, the demand for condo living remains steady. With replenished supply and improved affordability, prospective buyers have found opportunities in the market. However, inventory levels and market balance remain areas of consideration for both developers and homebuyers. It is essential for all levels of government to prioritize housing to meet the demand and provide the housing supply and choice that residents need in the Greater Toronto Area. Stay informed with our blog for the latest updates on the GTA real estate market.