Competition between buyers re-emerges in Toronto's real estate market


According to a report from the Toronto Regional Real Estate Board (TRREB), competition between home buyers is starting to pick up again after several months of sluggish sales in the Toronto area. The average price of a home in the area rose to $1,108,606 in March, up from $1,096,519 in February. This is the first time since May 2022 that the average home price has surpassed the average list price. While the current average price is still down almost 15 percent from the peak in March 2022, realtors and the board see the recent uptick in activity as a sign that the market is starting to tighten. Nasma Ali, the broker and founder of the One Group, part of Real Brokerage, noted that “for the month of March, we noticed more activity for listings, and with our buyers, we started to notice that our buyers are competing more and more with other buyers.”

However, potential buyers are being cautious and conservative in their bidding, with many choosing to bid below the asking price. This approach has left prices still far from their 2022 peak. For example, detached homes had an average price of $1,468,651, down 13.5 percent from a year ago, while semi-detached properties dropped more than 17 percent to $1,087,924. Townhouses cost an average of $935,626—a 14 percent decrease—while condos and apartments fell 13 percent to $703,566. TRREB’s March report also showed that the composite benchmark price was $1,118,500, a 16.2 percent drop on a year-over-year basis but up month-over-month on both an actual and seasonally adjusted basis. However, sales were still down almost 37 percent from March 2020.

Priscilla Thiagamoorthy, a BMO Capital Markets senior economist, noted that “there were signs that a bottoming process continued in March as market conditions tightened.” She also stated that “with the Bank of Canada staying comfortably on hold, more buyers are now starting to enter the market.”

On the other hand, sellers are not returning as quickly as buyers. Many are still waiting for prices to go back up to the peak levels of last year. As a result, new listings in March were down 44 percent from the prior March. TRREB’s report was released a day after TD Economics economist Rishi Sondhi sent a note to investors saying that “Canadian home sales appear to have reached a trough” after incurring a “dramatic slide” in prior months. Sondhi is now forecasting quarterly sales gains with stronger growth headed into the year’s second half.

In summary, the Toronto real estate market is starting to pick up again after several months of sluggish sales. While the current average home price is still far from the peak levels of last year, buyers are becoming more confident and competitive, while sellers are more cautious. Overall, the market appears to be tightening, and economists are predicting stronger sales growth in the coming months.

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