Lower home prices helped revive the Toronto real estate market in May with sales climbing for the third straight month.
There were 6,583 sales in the GTA region last month, according to the Toronto Regional Real Estate Board (TRREB), up 6.3% year-over-year.
Those sales numbers were 10 per cent higher than April’s on a seasonally adjusted basis. The month marked the largest number of transactions since November of last year.
Despite last month’s boost, May sales were still below the 10-year average for the month, which is 9,104 sales.
Sales are forecast to improve further as we move through the second half of this year. Recovery would be further bolstered by positive news on the trade front along with an easing of geopolitical tensions and related uncertainty.
Meanwhile, fewer homeowners put their properties up for sale. New listings were down 19 per cent year-over-year. The real estate board said this has likely increased competition for properties in some parts of the Toronto area.
That competition, however, did not lead to higher prices. The average sale price for the GTA was down 4.6 per cent to $1,069,700 compared to last year. In Toronto the average sale price was slightly higher at $1,108,292, but still down 4.1% year-over-year.
Toronto’s condo market saw average prices slip by 5% year-over-year to $673,841, though they managed a 1.3% rebound compared to April. Although resale condos are cheaper than newly built units, there is now an abundance of the high-rise product flooding the market.
“Spring sales have been stronger than last year, reflecting improved affordability stemming from lower selling prices and borrowing costs,” said TRREB president Daniel Steinfeld in a release.
“For the past four years, home prices have been on the decline owing in part to relatively higher mortgage rates and growing investor distaste for residential real estate.”
“Inventory levels trended lower over the past year, but buyers continued to have substantial negotiating power through the spring,” TRREB chief information officer Jason Mercer said in a news release.
Because the average price has increased over the last three months, it shows the impact of the “market tightening” as sales increase and inventory decreases, Mercer said. “If that continues, it will support pricing and even an increase for 2027,” he said alarmed. While the upward trend has been notable, delinquency and default levels still remain manageable for the major banks.