Despite a surge in homebuying activity in the second half of this year, average prices fell short of last year’s levels in most neighbourhoods throughout the Greater Toronto Area (GTA), including York Region. Still, sales here “soared.”
The Re/Max Hot Pocket Communities Report tracked average price and unit sales activity in 82 districts within the Toronto Regional Real Estate Board, Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board.
It found a substantial reduction in detached values in the first quarter of the year triggered a surge in homebuying activity in the second, with supply shortages accelerating upward pressure on pricing. Still, nearly 93 per cent of detached homes posted a decline in values in the first six months of the year, compared to the same period in 2022.
“Anxious homebuyers were quick to identify the bottom of the market and jumped in with both feet in the second quarter of the year,” says Re/Max Canada President Christopher Alexander. “The short burst of homebuying activity clearly underscored the resilience of the housing market, but the lack of inventory available for sale curtailed any real momentum from building.”
Demand was greatest for detached homes priced under $2 million, with sales more than doubling between the first and second quarters in key markets. Fewer detached homes changed hands year over year, with 95 per cent of markets surveyed reporting a downturn in homebuying activity.
Today’s purchasers are focusing on value-added properties and communities. “Listings that offer a short or long-term benefit – be it a basement apartment that allows homeowners to offset their mortgage costs now or homes that hold long-term potential in a future renovation or sale to a builder – are most sought after,” says Re/Max Canada Executive Vice President Elton Ash.
Value and necessity have trumped location, with a growing number of buyers willing to travel further afield to get the best bang for their buck. Detached housing sales in York Region, for example, soared in in the second quarter of the year, posting a 104 per cent increase over the first quarter (2,328 versus 1,143 sales).
Affordability was a major factor given detached properties in the 905-area code are priced significantly less than similar homes in the 416-area code. Buyers in the 905 are also not subjected to the municipal land transfer tax of two per cent to 2.5 per cent implemented by the City of Toronto, Re/Max notes.
In Markham, the average selling price dropped 6.8 per cent from $1.956 million in the first half of 2022 to $1.824 million in the first half of 2023. In Richmond Hill, prices dropped 0.9 per cent from $2.012 million to $1.993 million, while prices in Whitchurch-Stouffville dropped 15 per cent from $1.823 million to $1.549 million in that same period.
With inflation higher than expected in July, the Bank of Canada is expected to raise rates yet again in September. “If that holds true, homebuying activity will likely remain subdued for the foreseeable future,” says Ash. “However, we believe that once stability returns to housing markets across the country, momentum should build again as buyers take advantage of improved affordability levels. We expect the tide will turn. It’s only the timing that is still to be determined.”