Toronto's real estate market remains hot but shows first signs of cooling

While sales remained strong, the Toronto Regional Real Estate Board called it a "marked slowing" and said it signals a pullback in activity in a market that has been overheating since last year, despite the ongoing health crisis.

Home sales in April down 12.7% from month prior, average selling price down slightly

A real estate sign is pictured in a west-end Toronto neighbourhood last spring. A decrease in sales between March and April 2021 was a stark contrast to previous years, when average prices typically increased between those months and signalled the start of a flurry of spring sales. (Graeme Roy/The Canadian Press)

Home sales for the Greater Toronto Area remained strong in April, but the market is starting to slow from the intense pace seen earlier this year, the Toronto Regional Real Estate Board said Wednesday.

The board revealed 13,663 homes were sold in the region last month, a 362 per cent increase from the 2,957 properties sold in April 2020, which was the first full month of the COVID-19 pandemic.

However, home sales this April were down 12.7 per cent, from 15,652 a month earlier.

While the first three months of the year were full of bidding wars, soaring prices and a mad scramble to snatch up any available homes, Toronto real estate broker Wins Lai said she is seeing conditions cool.

"The stay-at-home order is definitely slowing things down a bit for people," she said.

"I have a lot of [clients looking to buy] that have sold, but they're just waiting on the sidelines because they want to see what is the right move for them."

Lai predicts there will be another housing boom later in the spring, when more people are vaccinated and taking part in pastimes curtailed during the pandemic.

She said she's noticed people being more judicious about what they bid on lately and careful about following COVID-19 restrictions, but she found many still want to buy now to take advantage of low interest rates.

New listings down from March

The number of homes they have to choose from is dramatically different from this time last year.

New listings in April soared by 237 per cent compared with a year ago but were down by 8.4 per cent compared with March 2021, TRREB said.

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Some people listing their homes aren't willing to ease up on pricing, even as the market slows, because the start of the year was so hot, Lai said.

"I'm working with some sellers who are not willing to bring the price down ... because they think, worst-case scenario, I'll just not sell it and stay where we are," she said.

The average selling price was $1,090,992, up 33 per cent from $820,226 last April, but down slightly from $1,097,565 in March 2021.

The decrease between March and April was a stark contrast to previous years, when average prices typically increased between the two months and signalled the start of a flurry of spring sales.

However, TRREB's chief market analyst, Jason Mercer, described the decrease seen this year as "modest slowing" and pointed out that prices across all major home types remain very high.

They were boosted in recent months by low borrowing costs during COVID-19, which sparked demand for housing, he said.

Prices still expected to rise

"While the pace of price growth could moderate in the coming months, home prices will likely continue on the upward trend," Mercer said in a release.

"Renewed population growth over the next year coupled with a persistent lack of new inventory will underpin home price appreciation."

While sales remained strong, TRREB president Lisa Patel called them a "marked slowing" and said they signal a pullback in activity in a market that may be fuelled by the region's population. "We've experienced a torrid pace of home sales since the summer of 2020, while seeing little in the way of population growth," she said in a release.

"We may be starting to exhaust the pool of potential buyers within the existing GTA population."

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