TORONTO — Greater Toronto Area home sales tumbled as fewer properties were listed and market conditions tightened last month, weighing on the regional real estate board’s sales forecasts for the year, but not dampening its price predictions.
The Toronto Regional Real Estate Board said Thursday that 5,636 homes were sold last month in the area, an 18 per cent drop from 6,888 last January.
New listings fell by more than 15 per cent to 7,979 last month from 9,438 during the prior January, while active listings took an even bigger hit, plummeting 44 per cent to 4,140 in January from 7,396 a year earlier.
"Supply continued to be near its all-time low," said Daren King, a National Bank of Canada economist, in a note to investors.
"With the recent easing of demand and slight increase in supply, market conditions have loosened slightly but remained largely favourable to sellers."
TRREB believes the slower pace of sales and fewer homes to buy will likely see 110,000 properties change hands in 2022 compared with 121,693 in 2021.
Some of that decrease will be triggered by an expected drop in first-time buyers, prompted in part by interest and lending rates that are poised to rise in the coming months.
Ipsos consumer polling TRREB released Thursday found fewer people in the suburban 905 area code surrounding Toronto will wade into the market for the first time this year, though its research also uncovered that first-time purchases could actually increase over last year in the 416 area.
TRREB’s chief market analyst Jason Mercer expects a divergence in first-time home buying intentions between the 905 and 416 because of the types of homes each area supports.
“A first-time homebuyer can only buy homes that are available at the price they can afford…and that means a condo because that’s more affordable than a row home than a single-detached home,” he said, at a press conference.
“Where are those (condos)? They’re in Toronto.”
TRREB and Ipsos’ data showed in Toronto there is a higher share of intending buyers — first time and otherwise — focused on condos and high density, lower rise home types.
The board expects detached houses to remain most popular with intending buyers, especially in suburban areas.
Those on the hunt for a home this year will notice the share of existing homeowners very likely to list their home for sale in 2022 will be down across the GTA, TRREB also said.
It attributed the unwillingness to sell to a “vicious cycle,” where homeowners will decide not to list because they fear they will not be able to find another home that meets their needs.
Those that list will find they can fetch more for their sale.
Prices will creep up to an average $1.2 million for the full year, a jump from an average of almost $1.1 million last year, TRREB predicted.
The average for January was $1.2 million, a roughly 29 per cent increase from $966,068 in January 2021.
Ipsos found immigrants willing to pay even more than other buyers in some segments of the market and is forecasting that they will have even greater home buying intentions than domestic purchasers.
It said immigrants were willing to pay about $100,000 more on average for a home, but noted that many of these buyers might not hold that property for long as they will likely move up to a bigger home in a few years.
This report by The Canadian Press was first published Feb. 3, 2022.
Tara Deschamps, The Canadian Press
