Toronto-area home prices down 4%, with May having another near-record low for sales

The end of Toronto’s spring real estate market remained muted, with the lowest sales data for May in more than two decades and prices softening across the board.

 

There were 6,244 sales in May, down more than 13 per cent compared to the same time last year, and the lowest May sales data since at least 2002, except for May 2020 right after pandemic lockdowns began.

 

In 2002, there were far fewer homes and people, with the city’s population growing by more than 35 per cent in two decades.

 

The average selling price across the GTA was $1.1 million, down four per cent year over year, according to a report from the Toronto Regional Real Estate Board (TRREB) released Wednesday.

 

“Home ownership costs are more affordable this year compared to last. Average selling prices are lower, and so too are borrowing costs. All else being equal, sales should be up relative to 2024. The issue is a lack of economic confidence,” said Jason Mercer, TRREB’s chief information officer.

 

As annual sales continued to trend downward, new listings have surged — amounting to almost 22,000 in May, up by 14 per cent year over year.

The sales-to-new-listings ratio is 28 per cent indicating a buyers’ market, meaning buyers’ have more negotiating power and choice.

 

However, on a seasonally adjusted basis, sales and prices increased slightly compared to April, with May recording the second monthly sales increase in a row, the report said.

 

Spring is typically a busy time in the real estate market but uncertainty with the U.S. trade wars has dampened sales and hurt consumer confidence.

“Once households are convinced that trade stability with the United States will be established and/or real options to mitigate our reliance on the United States exist, home sales will pick up,” Mercer said.

 

U.S. President Donald Trump is expected to double steel and aluminum tariffs on Wednesday, causing a major disruption to various Canadian industries.

 

But, “further cuts in borrowing costs would also be welcome news to homebuyers,” Mercer said.

 

On Wednesday morning, the Bank of Canada’s interest rate announcement could see a further 0.25 percentage-point decrease or a continued pause — but it’s widely expected the central bank will hold rates again.

If the central bank were to cut its key interest rate, it would have a meaningful impact for households to improve mortgage affordability, Mercer said.

 

In Toronto, semi-detached homes led the decline in home prices, seeing an 8.4 per cent drop year over year, followed by condos at 7.3 per cent, detached at 5.6 per cent, and townhomes at 3.3 per cent.

 

However, semi-detached homes saw the smallest drop in sales at 0.3 per cent, whereas detached and condos saw a 10.6 per cent and 25 per cent decline, respectively.

 

Semi-detached homes have a low volume of inventory in Toronto, so when there’s a few sales of homes selling for significantly less or more than their list price it can skew the data, Mercer said, adding he would caution around certain market segments that don’t have a high volume of sales.

 

There were more than 600 sales of semi-detached homes in the GTA in May — significantly less than the 3,000 sales for detached homes, and 1,480 condo sales.

 

 

 

 

 

This article was first reported by The Star