The gradual rise in GTA Real Estate prices continued in May, making it five straight months of gradual increases in the average home price.
While total sales from April to May fell slightly, this is part of an odd trend during that timeframe. In three of the past four years, the GTA has experienced a decline in total home sales from April to May.
GTA
While it was a slight increase, at 0.8%, the average price of GTA homes rose from $1,156,167 in April to $1,165,691 in May. Interestingly, the May average price is 2.5% lower than in May 2023 ($1,195,409). May 2023’s average price represented the price peak for the year, but I’m expecting this to be an outlier when comparing the rest of 2024 with 2023.
Total Sales
As mentioned, total sales fell from April to May to 7,013 from 7,114 (1.4%). It’s also 21.7% lower than the 8,960 posted in May 2023. The low sales numbers are also the lowest for any month of May in the 2000s (2020 excepted).
How is 2024 overall for total sales? This year’s 30,517 is behind the 31,322 of 2023, which happened to be the year with the lowest total sales in over 25 years. Overall the market continues to show signs of slower activity than baseline particularly due to the lack of investor activity and condo sales.
New Listings
New Listings kept going up in May, from 16,941 to 18,612. This matches the trend of 2024 monthly price increases, as New Listings have also gone up every month this year. Looking back at May 2023’s New Listings, they’re 21.1% lower than last month at 15,363.
Because of this stark disparity between New Listings and Total Sales, the absorption rate (sales to new listings) is a paltry 37.7%. This puts the market squarely in the buyer’s advantage. However the reality is very different depending on the neighbourhood and type of home. Houses in desirable neighbourhoods at competitive price points continue to perform relatively well.
Active Listings
Coinciding with the growth in New Listings, Active Listings maintained their upward trend, with 21,760 in May versus 18,0811 in April (+20.3%). Moreover, the 21,760 is a massive 83.4% higher than the 11,869 from May 2023. The interesting piece of this puzzle is that currently, more inventory is not leading to lower prices.
Toronto
The 416’s average sales price grew by a more significant margin than the GTA, at 3.5%, from $1,152,200 to $1,193,202. Total sales also rose from 2,581 to 2,701 in May, a 4.6% increase. My clients offered on a row house in the junction this week and with 14 offers resulted in a sold price 34% above asking.
New Listings shot up from April to May in the 416, from 6,655 in April to 7,360 (+10.6%). Active Listings were the most significant gainer month-to-month, from 7,506 to 9,029, a rise of 20.3%.
As you might have guessed by the above numbers, the Sales-to-New-Listings Ratio (SNLR) in the City of Toronto maintained its plunge. The SNLR fell from 41.9% SNLR to 39.8% in May. The GTA’s rate also dropped from 43.8% to 41.6% in May.
Outlook
With the Bank of Canada’s long-awaited (first) rate cut from 5% to 4.75%, action on the GTA Real Estate market might accelerate. Some pundits anticipate additional cuts now that the first one has been initiated, so expect inventory and competition to increase. Historically, sales values have increased with some ferocity following rate cuts but there are so many variables at this particular junction in the market and overall economy. Given that prices have been rising month of over (albeit quite moderately and still similar prices to last year), it seems likely that prices will rise with more busto in the next year. How much remains to be seen, however.
Thinking of moving to the next stage? Let’s chat. Send me an email (hillary@hillarylane.ca) or text/phone (416-882-4707).
Photo by Rowan Heuvel on Unsplash
