May 2024 Real Estate Market Update
Like April, May home sales were slower than average, especially in comparison to last spring’s short-lived pick-up in market activity.
Just over 7,000 homes traded hands in May, down 21.7% or nearly 1,950 transactions from May 2023.
With new listings up 21.1% over the same time period, buyers benefitted from more choice than they have seen over the past few years and greater negotiating power on prices.
Months of inventory at the end May was 3.1 months, indicating a balanced market. However, that’s for the entire Greater Toronto Area; some neighbourhoods are faster-selling, while others are a buyer’s market. There’s even difference between home types within a neighbourhood in terms of how quickly properties are moving.
The average selling price in the GTA for all home types was down 2.5% to $1,165,691 in May, from $1,195,409 a year prior.
All market segments saw an increase in active listings in May. The detached home segment closed the month with 9,335 properties on the market — the highest level since September 2019. The average sale price across the GTA is now $1,506,675, reflecting a 3% yearly decrease.
The semi-detached and townhouse sectors also saw significant increases in active listings. Sale prices are now on average $1,173,819 and $1,040,141, respectively.
Inventory in the condominium segment has surged year-over-year, resulting in 8,183 active listings, which will create an opportunity for buyers this summer. Despite this increase, sale prices have remained stable, with the average condo selling for $730,815, marking a modest 2% yearly decline.
The Bank of Canada’s much anticipated reduction in its key interest rate has begun, with a rate decrease of 25 basis points announced on June 5, bringing the new rate down to 4.75%. While a minor change, it signals a shift from the country’s national bank, kicking off an easing cycle that will deliver lower interest rates now that inflation is under control and a catalyst for buyers to re-enter the housing market.
Recent research from Royal LePage concluded the majority of buyers who put their home buying plans on hold when rates began to rise plan to resume house hunting once interest rates start to drop. Ten per cent of those buyers said that a mere 25 basis point reduction in rates would be enough of an incentive to restart their home buying efforts.
Given this, the current surplus of inventory is likely to be short-lived. As buyers get off the proverbial fence, increased competition will put upwards pressure on home prices. Royal LePage predicts that aggregate home prices in the GTA will be up 10% in the fourth quarter of this year, as compared to the same time period in 2023.
If you would like to know how the real estate market performed in your neighbourhood, contact Clare Tattersall at 647-625-3282 or clare@realtorontowest.com.
