GTA Housing Market Cools in May, Selling Prices Hit All-Time High

After several months of frenzied activity in the Greater Toronto Area (GTA) housing market, the Toronto Regional Real Estate Board (TRREB) is reporting that the number of home sales in the region has declined for the second consecutive month. Despite an apparent cooling in the market, the 11,951 sales recorded in May, 2021 total more than double the result from the previous May, when the pandemic was only a couple of months old.

Though monthly sales fell below the record of 12,789 set in May, 2016, the figure remains comfortably above the 2010-2019 average May sales of 10,336. Typically the strongest month of the year for sales, May, 2021’s numbers broke this streak, falling well below the 15,646 transactions recorded in March. 18,586 listings were reported in May, also more than double the pandemic lows of 9,126 recorded in May, 2020. 

TRREB condominium market report, Greater Toronto Area, real estateToronto skyline, image by Forum contributor Rascacielo

“There has been strong demand for ownership housing in all parts of the GTA for both ground-oriented home types and condominium apartments. This was fueled by confidence in economic recovery and low borrowing costs. However, in the absence of a normal pace of population growth, we saw a pullback in sales over the past two months relative to the March peak,” reads a statement issued by TRREB President Lisa Patel.

Average GTA selling prices increased dramatically in May, rising 28.4% year-over-year and reaching a record of $1,108,453. When measured on a seasonally adjusted basis, the average price increased by 1.1% in just the span between April and May, 2021.

“While sales have trended off the March 2021 peak, so too have new listings. This means that people actively looking to purchase a home continue to face a lot of competition from other buyers, which results in very strong upward pressure on selling prices. This competition is becoming more widespread with tighter market conditions in the condominium apartment segment as well,” reads a statement from TRREB Chief Market Analyst Jason Mercer.

“The housing supply shortage in southern Ontario has been well documented. Policymakers at all levels have acknowledged that supply is an issue. It is important to understand that dealing with this issue will be important not only for ensuring long-term housing affordability, but also the economic competitiveness of the Greater Golden Horseshoe. People and businesses are more likely to locate in regions that have an ample supply of affordable homeownership and rental options,” reads a statement from TRREB CEO John DiMichele.

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