The Toronto housing market witnessed a slowdown in July as home sales fell for the second consecutive month. According to the Toronto Regional Real Estate Board (TRREB), there were 9,390 sales in July, down 14.9% from June and 2% from July 2020. The average selling price also declined by 2.8% month-over-month to $1,062,256, but was still up 12.6% year-over-year.
The drop in sales was attributed to the low supply of listings, which fell 30.7% annually and 7.9% monthly to 10,595. The sales-to-new listings ratio, which measures the balance between demand and supply, was 88.7%, indicating a tight market with strong competition among buyers.
TRREB President Kevin Crigger said that the demand for housing in the Greater Toronto Area (GTA) remained well above the long-term average, but the supply was not keeping up. He added that more listings were needed to ensure a healthy and sustainable market in the future.
Impact of COVID-19 Pandemic
The COVID-19 pandemic has had a significant impact on the Toronto housing market, as it has on many other markets around the world. The lockdowns and restrictions imposed to curb the spread of the virus have affected the preferences and behaviors of buyers and sellers.
On one hand, the pandemic has increased the demand for larger and more spacious homes, especially in the suburbs and rural areas, as more people work from home and seek more comfort and amenities. On the other hand, the pandemic has also reduced the supply of listings, as some sellers have been reluctant or unable to put their properties on the market due to health and safety concerns.
The pandemic has also influenced the types of homes that are selling in the GTA. According to TRREB, detached homes accounted for 53.6% of total sales in July, up from 49.3% a year ago. Meanwhile, condo apartments accounted for 23.6% of total sales, down from 28.8% a year ago. The average selling price for detached homes was $1,405,478, up 21.1% year-over-year, while the average selling price for condo apartments was $686,312, up 8.8% year-over-year.
Outlook and Challenges
The Toronto housing market is expected to remain strong for the rest of the year, as the economy recovers from the pandemic and vaccination rates increase. TRREB Chief Market Analyst Jason Mercer said that low borrowing costs and improving employment conditions would support the demand for housing in the GTA.
However, there are also some challenges and risks facing the market, such as affordability issues, rising inflation, and potential policy changes. Mercer said that policymakers at all levels of government should focus on increasing the supply and diversity of housing options in the GTA, rather than imposing measures that could dampen the demand.
He also said that TRREB would continue to monitor the market closely and provide evidence-based analysis and recommendations to its members and stakeholders.