Greater Toronto real estate is getting a boost from the return of cheaper financing. TRREB reported existing home sales in the region ripped higher in January. Growth significantly outpaced new inventory, helping to firm the market. However, there had been so few buyers recently that the massive growth barely translated into a balanced market, and was unable to prevent home prices from falling further.
Greater Toronto Real Estate Prices Continue To Slide Lower
Greater Toronto existing home prices continued to slip last month, albeit at a slow pace. The benchmark across TRREB slipped 0.1% (-$1,400) lower to $1,065,800 in January. Home prices are down just 0.4% compared to the same month last year.
Home prices in the City of Toronto are providing most of the downward pressure. The City’s benchmark fell 0.3% (-$3,200) to $1,050,300 last month. This represents a 1.2% decline from a year before, not exactly a serious drop. However, like the regional benchmark, it was a slight acceleration of downward pressure on home prices.
Greater Toronto Real Estate Sales Jumped 39% Higher
Behind the softening downward pressure on prices is a sudden pop in existing home sales. The start of the year is historically slow, but existing home sales reached 4,223 units in January, up 37% compared to a year before. New listings only climbed 6.1% to 8,312 homes over the same period, slightly tightening the market.
Huge Growth In Sales Was Only Enough To “Balance” The Market
The term slightly is warranted here, since the sales to new listings ratio remained at 50% in January. Even with the huge surge in sales outpacing new inventory, the market is considered balanced—not hot. Though good luck explaining that to exuberant buyers.
Last month was stronger than many had anticipated, but the period isn’t enough to get a solid read. December through February tend to be light on sellers, with most opting to hold off until the much busier Spring market. At the same time, buyers haven’t exactly eased off, they have been moving with financing. Whether this momentum can carry into the Spring remains to be seen. Ditto on whether this building momentum is noticed by the central bank, furthering the belief there’s no rush for rate cuts.