GTA Home Prices Remain Stable as Inventory Falls Short of Demand
In September, GTA buyers were faced with significantly lower inventory than might be anticipated in an early fall market. New listings in September were down 16.7% year-over-year, the lowest number of new listings reported for the month of September since 2002. With fewer homes to choose from, multiple offer scenarios were once again commonplace across the GTA last month.
Average prices in the GTA this September were higher than they were in August, despite inflation and increased borrowing costs. The average price of a home in the GTA is now $1,086,762. This is 4.3% lower than the average price seen in September 2021, however benchmark home prices remain 4.3% higher than they were a year ago.
Overall, GTA prices have stabilized as compared to the spring months where we saw some price declines. In fact, in a number of GTA neighbourhoods, prices have increased significantly over the past two months due to increased competition and a lack of inventory.
While the median price of a home in the GTA is about the same as it was last year, the cost to rent a home in the GTA has skyrocketed in the same period. Median rental costs are up approximately $500 per month since September 2021 to just under $3,000 per month, creating new opportunities for investors who may have been concerned about carrying costs when interest rates started climbing. First-time buyers should also assess whether the cost of renting makes sense given current rental rates and inventory, as compared to purchasing a home.
September sales volume remained well below what we saw last year at the same time. September 2022 saw 5,038 sales, which is 44.1% lower than September 2021. September also saw less homes sold than August, when typically, the start of fall would drive more home sales.
When sales activity is below average, the issue of supply tends to take a backseat. However, when sales activity returns to normal levels, the issue of supply will once again create pain for buyers looking for the opportunity to enter or move up in the market. Statistics Canada recently released a report showing Canada’s population has recently been growing at almost double the rate of the rest of the G7, and that trend is expected to accelerate. Simply put, our current infrastructure and housing supply is inadequate to support this level of growth, which long term, will continue putting pressure on prices and create scenarios where those qualified and looking to purchase a home will be forced to compete with others for a limited inventory of available properties.