Prospective buyers are still hesitating to wade into the Greater Toronto Area housing market, pushing May home sales in the region down by 22.2 per cent compared with the same month last year, said the Toronto Real Estate Board (TREB).
The board said Monday that while the number of sales was down year-over-year to 7,834 units, the annual rate of decline was less than reported in February, March and April, when sales were down by more than 30 per cent.
In May, it found the average selling price for all home types combined fell 6.6 per cent to $805,320, new listings declined by 26 per cent year-over-year to 19,002 and the seasonally-adjusted month-over-month sales slipped 0.4 per cent lower than the previous month.
The numbers indicate that the market is continuing to cool from last year’s frenzied pace that saw bidding wars become common and home prices soar.
BMO Capital Markets economist Benjamin Reitzes took TREB’s release to be “not quite a positive report” because the MLS Home Price Index was down 5.4 per cent year-over-year, a larger fall than the prior month’s 5.2 per cent drop.
However, Reitzes said stabilizing the market after last year — what some consider a market peak, before the Ontario government brought in a package of measures to cool the market – is key, especially if the Bank of Canada is going to raise its benchmark interest rate again in July.
The Toronto board’s May numbers brought a few bright spots for sellers. On a seasonally adjusted basis, the average selling price was up 1.1 per cent compared to the previous month of April.
Jason Mercer, TREB’s director of market analysis, said market conditions are becoming tighter in the GTA and this will provide support for home prices through the second half of 2018 and into 2019.
“There are emerging indicators pointing toward increased competition between buyers, which generally leads to stronger price growth,” Mercer said in a statement.
“In the City of Toronto, for example, average selling prices were at or above average listing prices for all major home types in May.”