Amid an influx of new listings, home price growth in Toronto has slowed in April, leaving real estate agents to wonder the direction the market in the Toronto area is likely to take as summer approaches on the north shore of Lake Ontario.
New listings have hit their highest level in seven years, which may indicate the market could be cooling. This comes as the provincial government in Ontario enacted new laws designed to halt out-of-control gains in the nation’s largest market.
Jason Mercer, head of market analysis at the Toronto Real Estate Board (TREB) said in a statement that “f new listings growth continues to outpace sales growth moving forward, we will start to see more balanced market conditions.”
“It will likely take a number of months to unwind the substantial pent-up demand that has built over the past two years,” he concluded.
According to data from the TREB, housing prices increased 25 percent in April, down from the 33 percent annual increase the previous month.
The current average price in April for a house in Toronto is C$920,791 ($671,000). This was just 0.5 percent higher than in March.
In April, many house hunters moved to the sidelines as Ontario’s leaders debated whether they needed to tap the brakes on runaway price growth in Toronto’s real estate market. As a result, listings became scarce and agents found that many potential buyers were waiting for new offerings to hit the market in time for spring.
Then, on April 20, Ontario Premier Kathleen Wynne unveiled a package of 16 reforms, including a 15 percent tax on foreign buyers, expanded rent controls and a promise to grant the city of Toronto the power to tax vacant homes.
A piece of good news for agents is data from TREB shows that listings increased 33.6 per cent in April compared with the same month last year.
That means more choice for consumers and healthy sale prices for sellers, say real estate agents.
This is an interesting trend from previous months, during which listings were off by nearly half of last year’s levels.
Jimmy Molloy, an agent with Chestnut Park Real Estate Ltd., told the Globe and Mail he believes the call for caution from Ontario’s leaders, paired with an increase in listings, has led buyers to feel a little less pressured.
“There’s almost a psychological warfare mounted by the government to get everyone to step back and be a little more thoughtful,” he said.
Smith also noted that he doesn’t expect the foreign buyers tax to have much impact on the market.
Ultimately, whether the spike in listings is due to sellers cashing out of a cooling market or if it’s a shift rooted in new provincial real estate policies, remains to be seen, say officials with the TREB.
