The GTA housing market appears to have turned around after more than a year of price declines, but a likely pick-up in sellers in the coming months should “keep any price increases relatively contained,” according to a new report from RBC.
The bank’s home price index for the GTA rose 2.4 percent in April, marking the second straight month of gains.
In its report, published last week, RBC said that while there was a 6.5 percent increase in new registrations in April, “new sellers only partially responded to rising demand”.
The bank said that as a result, “supply-demand conditions have tightened for the fifth straight month and now look as firm as before the market downturn.”
However, RBC does not expect the near-record low number of listings that have defined this real estate correction to continue as the market recovers.
“To a large extent, sellers hold the key to developing the market. Much will depend on how far they return to the game and remodel (currently low) inventories. We believe that an increasing number of them will actually put their homes up for sale after property values have turned around. And this should keep any price increases relatively contained,” the report states.
According to the latest data from the Toronto Regional Real Estate Board, the median price for a home in Toronto was still down 7.8 percent year-on-year in April.
But selling has picked up and prices have stabilized in recent months after the Bank of Canada decided to interrupt one of the most aggressive rate-hiking cycles in its history.
In April, overall sales were down about 5.2 percent year-on-year but up about 9 percent from March
The number of listings, meanwhile, fell more than 38 percent from this time last year.
“The coming months should be quite interesting. The other side of the valley promises a better environment for sellers who may have previously been reluctant to sell in a bearish market. This will hopefully bring more supply and support historically low inventories,” RBC’s report said. “The end of price corrections will also spur some market timing buyers into action. Both factors would maintain or even extend April’s gains. However, the lack of affordability will remain a major concern, especially for first-time buyers. In our view, this will initially limit any recovery significantly.”
The average Toronto home price across all property types peaked at $1,334,062 in February 2022 before falling to a recent low of $1,037,542 in January.
The average price of a GTA house in April was up about 11 percent from its low of $1,153,269.
