The GTA housing market saw activity fall year-over-year in both January and February, and it looks like March could bring more of the same. But, according to a new report, month-over-month activity continues to inch upwards.
“Temperatures are slowly rising throughout the Greater Toronto Area, coaxing buyers back into the real estate game within the first two weeks of March,” writes Zoocasa managing editor Penelope Graham, in a recent report. “While overall market conditions remain between 30-49 per cent below 2017’s rampant activity, demand is increasing month-over-month, signalling that a strong spring is on its way.”
This time last year, GTA housing activity was reaching record heights. In comparison, sales and prices dropped off dramatically in January, as the market adjusted to a new mortgage stress test and an interest rate hike. Now, it looks like the market is starting to adjust to the shock of the policy changes.
“Sales are up across all home types [in the first two weeks of March], from the same period in February, with growth 35-67 per cent higher in the GTA and 38-68 per cent within the City of Toronto proper,” writes Graham.
As demand has started to rise, supply has begun to fall — inventory levels for condos fell 4 per cent year-over-year in the first two weeks of March, while levels for semi-detached homes fell 1 per cent.
Overall, the market remains in balanced territory, with a sales-to-new listings ratio of 47 per cent, though within the 416 that number tightens to 62 per cent. A ratio between 40 to 60 per cent is considered balanced, with readings below and above indicating buyers and sellers markets, respectively.
These numbers support the forecasts of many industry experts, who have been predicting that the market will begin to heat up later into the year.
“As we move further into the spring and summer months, growth in sales and selling prices is expected to pick up relative to last year,” Toronto Real Estate Board director of market analysis Jason Mercer wrote in a recent report.
He predicts that the condo market will continue to be particularly strong, as it remains one of the few affordable homeownership opportunities for many first-time buyers.
“Expect stronger price growth to continue in the comparatively more affordable townhouse and condominium apartment segments,” he writes. “This being said, listings supply will likely remain below average in many neighbourhoods in the GTA, which, over the long-term, could further hamper affordability.”