Wednesday, May 18, 2022 / by Sushma Khinvasara
Toronto home sales down in April 2022, the biggest drop in 2 years
The Toronto housing market has seen a sharp decline in sales as interest rates climb. Home sales dropped by 41.2% from last year and 26.2% from previous month. The same is true to the condo market with a 15.6% decline in sales year-over-year. These numbers give a very clear sign that the Toronto market is indeed cooling down with the mortgage rates at highest since 2020. The central bank has lifted the interest rate from 0.25% to 1% and expected to rise to 1.5% by June 1.
More properties sitting on the market
With prospective buyers putting a hold on homebuying, a lot of properties are now just left sitting on the market with some listed for more than 20 days. This is a sharp contrast to what it was like months ago when buyers were up to their necks to secure bookings to visit condos and other properties on the market. Now, viewing appointments has declined as demand in the market slowed down.
We have also seen a 12% drop in listings as properties newly listed decreased from 20,841 to 18,413 year-over-year. Many sellers are likely hesitant to list their properties given the high interest rates and soaring inflation, the upcoming Ontario election, and the current war crisis in Ukraine.
Decline in homebuyers
Like the sellers, many buyers are also hesitant to enter the housing market now that they have a lower buying power due to high interest rates. Instead, homebuyers are on a wait-and-see on how the market will turn out in the next few months. The number of buyers currently in the market are just enough to keep the market going but not as wild a few months back with bidding wars and skyrocketing prices.
Slight decrease in home prices
For the second month in a row, home prices in Toronto had dropped by 6.4% from March. Although the average price for homes still sit at $1.2M which is 15% up from last year, it is likely that home prices might go down further with less competition on the market. Still, it is not surprising to see some sellers continue to overprice their properties hoping to get top dollar for their homes as it takes time to adjust to what's really happening to the housing market.
Let us take a look at the numbers presented by TRREB in their latest April 2022 statistical update for GTA.
Source: TRREB May 16, 2022
Year-over-year Total Residential Transactions
April 2021 - 13,613
April 2022 - 8,008
There was a decrease of 41.2% in sales compared to last year. For April 2022 sales result over March 2022, sales also decreased by 26.2%.
March 2022 -8,626
April 2022- 6,367
There was a decrease of 26.2% in sales compared the previous month.
The number of home sales in April 2022 decreased by 41.2% on a year-over-year basis, and also went down by 26.2% from last month.
However, the average selling price of homes has seen an increase
April 2021 - $ 1,090,414
April 2022 - $ 1,254,436
There was a 15% increase in selling price compared to last year.
For the average selling price compared to the previous month, there was a decrease of 6.4% for the home prices.
March 2022 - $ 1,285,534
April 2022 - $ 1,202,819
There was a decrease of 6.4% in selling price compared the previous month.
Total New Listings added to the Market
April 2021 - 20,841
April 2022 - 18,413
There was a decrease of 11.7% in new listings in a year-over-year basis.
The April 2022 % Sales-to-New Listings Ratio of 43% decreased by 22% compared to 65% of April last year.
Condominium Sales Statistics
Year-over-year Total Condo Apartment Sales
Q1/21 - 9,399
There was a decrease of 15.6% in condo sales compared the previous year. However, there was an increase in the average selling price for condos.
Q1/21 - $ 645,503
Q1/22- $ 790,398
There was an increase of 22.4% in average selling price compared the previous year.
Here is the summary of the listings of condominiums
Year-over-year Total New Listings
Q1/21 - 11,387
There was a slight increase of 0.3% in new listings compared the previous year.
From April 16 to May 14, there were a total of 607 sales in townhouses, lower by 39% compared to previous year. There were 949 new listings, also down by 10%. For the average selling price, a 1 Bd Townhouse can cost $700,000 which is 4% higher compared to the same month of last year. While a 2 Bd Townhouse costs $1.1M, also an increase of 14% compared to the previous year.
So, these are the current market conditions in the GTA. Sales and home prices have dropped as demand from buyers continue to decline. New listings have also decreased as current properties listed stay in the market for a longer time unlike before that sells in just a few days. The Toronto housing market will likely have enough supply of sellers and buyers to carry on, but price growth will likely be moderate in the coming months.
If you have any question about Toronto housing market or need help buying or selling your home, you can contact me at 647-834-9928 or send an email to firstname.lastname@example.org