There were no surprises in the May residential resale market data. As a result of rising mortgage interest rates, a process that started in March, the number of properties sold has declined, and average sale prices have moved downward from the record-breaking highs of February.
During the month of February 9,052 homes were reported sold with the Toronto and area’s average sale price coming in at an eye-popping, unsustainable, $1,333,399. In May 7,283 properties were reported sold, with an average sale price of $1,212,806. Since February, sales have declined by more than 19 percent, and the average sale price for all properties sold, including condominium apartments, has slipped by 9 percent.
It should be noted that even with this decline, the average sale price in May remains 9.4 percent higher than that achieved last May ($1,084,124).
A notable shift in market dynamics is the change in activity in the 905 region as compared to the 416 (City of Toronto). Throughout the first two years of the pandemic, more sales were taking place and average sale prices were rising faster in the 905 region. This is no longer the case. During the month of May, the average sale price for all properties sold in the 905 region came in at $1,212,806, 1.7 percent less than the City of Toronto’s average sale of $1,233,748. The ratio of sales has also shifted. Last year the 905 region accounted for 66 percent of all properties reported sold. This May, only 62 percent of all properties changing hands were in the 905 region.
These results are not surprising. As more of the greater Toronto area’s population has been vaccinated against the Covid virus, and as the City of Toronto with its many amenities has opened up, the forces driving buyers to move to the 905 region, the need for more space, ground-level housing, and a sense of safety in less dense communities have begun to wane.