Market Watch Q1

Activity Moderates as Buyers Hold Out for Rate Cuts

Low-rise Inventory Falls to 1.5 Months or Less

After starting the year with renewed momentum, the GTA housing market took a step back in March as buyers remained cautious in an increasingly competitive environment.

The combination of low affordability and low supply has created challenges for buyers, many of whom are waiting on the sidelines in anticipation of more listings and potentially lower interest rates in the months ahead. The timing of expected interest rate cuts has recently been pushed out due to stronger than expected economic data

Average resale prices edged up 1.1% month-over-month and 1.3% year-over-year to $1.121 million.

Average selling prices saw little change from a year ago across all housing types during March, with detached prices flat, prices for semis/rows/towns up 1.6% and condo apartment prices down 0.5%

Compared to two years ago when interest rates were beginning to rise, average prices by housing type have declined by between 13.5% and 14.4%.

Inventory Updates

Supply was a major factor restraining sales last month.

The month-over-month increase in new listings (+18%) was well below normal, pushing new listings in March 17% below the 10-year average. This held the sales-to-new listings ratio at a balanced level of 50%.

Detached homes experienced a 3% annual decline in active listings during March, illustrating the continued downward pressure on available inventory in this segment, which fell to 1.5 months of supply

Even with a 29% annual increase in active listings, inventory in the semi/row/town category decreased to 1.3 months of supply. Semis/rows/towns were the only housing segment to record an annual increase in sales during March (+2%).

Q1 Sales Up 20% for $800-899K Detached Homes and 22% for $1.25-1.49M Condos

Following the improvements in January and February that saw sales begin to normalize, March activity became more subdued. The 6,560 sales in March declined 4% year-over-year, representing the lowest March total since the global financial crisis in 2009 and falling 30% below the 10-year average (9,328). For Q1 as a whole, sales were up 11% year-over-year.

While sales rose 17% month-over-month, this level of growth was substantially below normal seasonal increases in activity of 40% or more between February and March. This was in part due to the extra day in February and loss of a business day in March from Good Friday

The 10% annual growth in Q1 sales for detached homes was derived from increased activity across all price segments above $600K. The strongest annual growth was recorded for homes selling for $800-899K (+20%) and those in the $1.0M to $1.749M price segment (+15%). At the top end of the market, detached home sales of $2M+ were up 7% year-over-year in Q1

City of Toronto Low-Rise Market Outperforms 905

Low-rise homes in the City of Toronto generally outperformed the 905 Region during March. The annual decline in detached sales was smaller in Toronto than in the 905 (-3% vs. -5%), while prices increased 2% in Toronto, compared to no price growth in the 905. There was a similar trend for semis/rows/towns, which showed higher sales growth in Toronto (+6% vs. +1% in the 905) and median prices up 3% (compared to no growth in the 905).

Inventory for both detached homes and semis/rows/towns was exceptionally low across all regions of the GTA at under two months of supply

In the condo apartment market, conditions were generally softer in the City of Toronto compared to the 905 Region. The 16%   annual decline in sales in Toronto was double the 905 decline of 8%, which included a 21% drop in sales in Central Toronto.  despite having the highest inventory at 3.9 months, Central Toronto median condo prices were unchanged from a year ago. In  the 905, market conditions for condos were softest in Peel Region, where sales fell 20% annually and inventory equaled 2.9  Months of supply.