‘Affordability is probably worse than before:’ Three things to know about Toronto’s spring real estate market
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Loading... - Emerald Murphy
- 20 Mar 2023
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There appears to be early signs of life in the GTA housing market, after both buyers and sellers spent a good chunk of the last year on the sidelines.
But with new listings at a 20-year low in February and higher borrow costs continuing to weigh on the market, it’s anyone’s guess what the typically busy spring season could bring.
Will it look like 2022 when the beginning of an aggressive interest rate hiking cycle by the Bank of Canada brought the pandemic buying frenzy to a virtual standstill?
Or will the market spring to life, after months of little to no activity?
Realtors and others who follow the industry closely aren’t sure what to expect.
They mostly agree that buyers and sellers will return to the market in greater numbers but whether that means the end of what RBC once called a historic housing correction isn’t as clear.
“I would say that we have some sense that we might actually get to see a little bit of a spring market. There's been an uptick in our incoming transactions and we have seen an increase of 30 per cent in deposits into our trust account. So there is an increase in activity. But is it enough for me to say to you that we are going to have a booming spring market? No,” John Lusink, president of RealServus, which owns Right at Home Realty, Condos. ca and MrLOFT.ca, told CP24.com this week. “That is because of the listing inventory. We are currently at just over 2,000 listings for Right at Home and that hasn’t changed since last May. It is a 25 per cent increase over a year ago. But that doesn’t even come close to making it interesting for buyers.”
The average price of a Toronto home was $1,095,617 in February.
While that represented a nearly 18 per cent decline from one year ago, it was up approximately five per cent from the previous month.
Speaking with CP24.com, Lusink said that prices have now largely returned to “quasi 2020” levels in the GTA and may even have found a bottom.
He said that lately he is hearing more about multiple offer situations on properties, although he concedes that few of those bidding wars are resulting in homes changing hand for hundreds of thousands of dollars over asking price as was commonplace during the early days of the pandemic.
In one case, he said that a creative buyer made two offers. One with no conditions whatsoever but below list price; another for more money but with conditions.
“There is I guess a floor, a pretty tough floor, under the current level of pricing because there just isn't the competition,” he said. “Sellers are saying ‘why would I lower my price? I'm the only one on the street for sale.’ So until we see an increase in in product we aren't going to see the effect on price. It is really about supply from my point of view.” Read More…
