The Toronto Regional Real Estate Board (TRREB) released their Market Watch Report for April 2023 this week. According to the report, the average selling price for the GTA increased for the third month in a row to $1,153,269. Fueling the increase was a drastic drop in new listings, down 38.3% in April 2023 on year-over-year basis which has led to an increase in competition between buyers.
“As demand for ownership housing has picked up relative to supply, we are seeing renewed upward pressure on home prices. For a short period of time, higher borrowing costs trumped the impact of the constrained housing supply in the GTA. Renewed competition between buyers is once again shining the spotlight on the persistent lack of listings and resulting impact on affordability,” said TRREB Chief Market Analyst Jason Mercer.
Fixed rate mortgages fell
Canada’s reintroduction of easy credit may also be helping increase demand. Fixed rate mortgages fell an average of 0.3 points between March and April, encouraged by The Bank of Canada pause on rate increases. Both of these changes increased the mortgage amount a buyer could borrow by 2.6%.
Despite higher home prices savy buyers remain in the market. Largely because monthly payments for a benchmark home in March remain the same in April with any increases from higher home prices being offset by lower interest cost.
The benchmark price of a typical home climbed 2.4% to $1,145,700 in April. This is the third consecutive increase. It follows a slightly higher 2.5% gain in March. Prices remain lower than last year, but if the trend continues at this pace, it could quickly reverse those losses.
“In line with TRREB’s outlook and recent consumer polling results, we are seeing a gradual improvement in sales and average selling price. The issue moving forward will not be the demand for ownership housing, but rather the ability to meet this demand with adequate supply.” said TRREB President Paul Baron.
If you’re thinking of selling – now may be the time!