One year ago, and even early this year, real estate pundits — and this writer — were predicting Canada’s two largest housing markets would be on their knees, facing large price declines and evaporating sales..We were wrong, very wrong..Reports released Friday from the real estate boards in the Greater Vancouver Area (GVA) and the Greater Toronto Area (GTA) show both markets are now above or only a small degree below levels attained last year..Greater Vancouver Area.The Real Estate Board of Greater Vancouver (REBGV) reports sales reached 3,411 homes in May, 15.7% higher than the 2,947 sales in May 2022.."Back in January, few people would have predicted prices to be up as much as they are, ourselves included, "says Andrew Lis, REBGV director of economics and data analytics..“Our forecast projected prices to be up modestly in 2023 by about 2% at year-end. Instead, Metro Vancouver home prices are already up about 6% or more across all home types at the midway point of the year.”.The 5,661 properties newly listed for sale in Metro Vancouver in May 2023 was an 11.5% decrease, year-over-year, while active listings reached 9,293 homes, a 10.5% decline from May 2022..“You don’t have to squint to see the reason prices continue to increase,” says Lis. “The fundamental issue remains there are more buyers relative to the number of willing sellers in the market. This is keeping the amount of resale homes available in short supply.” .“And in a surprising twist, sales in May snapped back closer to historical averages than we’ve seen in the recent past, despite mortgage rates being where they are now, and new listing activity having been slower than usual this spring. If mortgage rates weren’t holding back market activity so much right now, I think our market would look a lot like the heydays of 2021/22, or even 2016/17.”.The composite benchmark price in Metro Vancouver in May was $1,188,000, a 5.5% decrease from May 2022 and a 1.3% increase compared to April 2023..Single-family home sales were 1,043 in May, up 30.7% from the 798 single-family sales in May last year. The benchmark price is $1,953,600, down 6.7% from May 2022 and a 1.8% increase April 2023..Sales of apartments reached 1,730 in May 2023, a 7.9% increase from the 1,604 sales in May 2022. The benchmark price is $760,800, down 2% from May last year and up 1.1% from April 2023..Attached home sales last month were 608, a 16.7% increase over the 521 sales in May 2022. The benchmark price is $1,083,000, down 4.7% from May 2022 and .2% higher than April 2023..Greater Toronto Area.There were 9,012 sales in May 2023, a 24.7% increase from May 2022, reports the Toronto Region Real Estate Board (TRREB), adding new listings were down by 18.7% over last year. Sales were up 5.2% from April..“The demand for ownership picked up markedly in recent months. Many homebuyers recalibrated their housing needs in the face of higher borrowing costs and are moving back into the market,” says Jason Mercer, TRREB’s chief market analyst..“In addition, strong rent growth and record population growth on the back of immigration has also supported increased home sales. The supply of listings hasn't kept up with sales, so we have seen upward pressure on selling prices during the spring.”.The composite benchmark was down by 6.9% year-over-year in May, but up by 3.2% on a seasonally adjusted monthly basis compared to April. The average selling price, at $1,196,101, represented a small 1.2% decline from May 2022. On a seasonally adjusted monthly basis, the average selling price was up by 3.5% from April 2023.. As in most Canadian markets, housing supply is critically short, which governments must give more attention, says TRREB president, Paul Baron..“Despite the fact we've seen positive policy direction over the last couple of years, governments have been failing on the housing supply front for some time. Recent polling from Ipsos found City of Toronto residents gave council a failing grade on housing affordability and pointed to lack of supply as the major issue” says Baron. .“This issue is not unique to Toronto. It persists throughout the Greater Golden Horseshoe. If we don't quickly see housing supply catch up to population growth, the economic development of our region will be hampered as people and businesses look elsewhere to live and invest.”.Lack of supply drives prices higher, says TRREB’s CEO, John DiMichele. .“The high cost of housing, brought about by short supply and high borrowing costs, is part of the broader increases in the cost of living. Municipalities, including the City of Toronto, need to be mindful of this when considering their revenue generation options,” says DiMichelle..“TRREB believes households will have little patience for higher taxes, including unreasonable property tax hikes and increases to prohibitive upfront land transfer taxes.”
