TORONTO - Prospective homebuyers saw clear signs of a cooling Toronto market in April as the region's real estate board reported sales dropped by about 41 per cent since last year and 27 per cent from a month earlier.
The Toronto Regional Real Estate Board said Wednesday that April sales amounted to 8,008 across the region, down from 13,613 during the same month last year and 10,939 in March.
The board attributed much of the decline to homebuyers who are taking a break from the market to reassess how they will change up their strategy as interest rates climb and reduce their buying power.
“We've seen a change in the market ... business is still happening, but it's not as crazy,” said Despina Zanganas, a Toronto Realtor with PSR Brokerage.
“What I've seen is a lot of properties just sitting on the market.”
Months ago, it was hard for her to even secure a booking to visit some condos listed for sale, but now viewings have plunged. She often sees condos receive only one or two visits a day from prospective buyers, leading her to believe demand has slowed.
The slowing is most pronounced in the area surrounding Toronto known as the 905, which includes municipalities such as Mississauga, Brampton, and Markham. TRREB found the year-over-year decline in sales was greatest in the 905 last month and was particularly apparent in the detached housing category.
Sales of detached homes in the 905 totalled 2,732, a more than 47 per cent plunge from the year before, while the market's 1,033 townhouse sales amounted to a 44 per cent drop. There were 491 sales of semi-detached homes in the 905 last month, a 40 per cent fall from the year before, and the 685 condo sales decreased by roughly 32 per cent.
April detached home sales in the city of Toronto, which is linked to the 416 area code, reached 868, a 34 per cent drop from a year before, and semi-detached home sales fell 26 per cent to 311. Townhouse sales for the month amounted to 335, a 42 per cent fall from the same month a year earlier, while 1,488 condos sold in April, down 35 per cent from the same month in 2021.
The drops in sales also weighed on home prices, which have been climbing steadily for much of the COVID-19 pandemic and were often fuelled by bidding wars and intense competition.
April's average home price for Greater Toronto reached more than $1.2 million, down from about $1.3 million the month before.
However, April's average price was still up by about 15 per cent from the year before, when the average price was more than $1 million.
Zanganas believes it is taking time for sellers to adjust to the market's current conditions.
“A lot of these sellers are not accepting the reality of what's happening, so they're still overpricing their properties and expecting like $200,000 over,” she said
Last weekend, she viewed several homes, which had offer dates and didn't yield the kind of bids sellers were hoping for.
The sellers have since increased the price, but a lot of these homes have been sitting on the market for about 20 days, far longer than they would have earlier this year or last, when conditions were heated and homes sold in little time.
TRREB previously predicted the average selling price across all home types would be more than $1.2 million by the end of 2022.
“It is anticipated that there will be enough competition between buyers to support continued price growth relative to 2021, but the annual pace of growth will moderate in the coming months,” said Jason Mercer, TRREB's chief market analyst, in a release.
Price growth and supply are being closed watched because buyers and brokers spent the start of the year bemoaning a lack of listings and predicting that the spring market would turn things around.
April's new listings dropped by about 12 per cent to 18,413 from 20,841 during the same month the year before, TRREB found.
Many clients have yet to list their properties because they are anxious about how the market will respond to interest rates, the forthcoming Ontario election, Russia waging war in the Ukraine and soaring inflation, said Zanganas.
“There's so much in the air right now that people just are waiting to see what happens and they're waiting to pull the trigger, but there's definitely a lot of people who want to get in.”
This report by The Canadian Press was first published May 4, 2022.