The housing industry in Greater Toronto Area (GTA) is hot as sales skyrocketed in May 2023. However, there is a major problem - there are not enough homes to meet the rising demand, which has caused buyers to fiercely compete for properties. Last month, the average selling price for a home was almost $1.2 million, reaching an all-time high. Unfortunately, the shortage of affordable housing and limited supply are concerning issues for the region's economic development.

Sales Are Up But Supply Is Down

GTA REALTORS® reported that 9,012 properties were sold through the Toronto Regional Real Estate Board's MLS® System in May 2023, which is a 24.7% increase compared to the same time last year. However, new listings fell by 18.7% in comparison, which indicates a supply shortage. Sales increased by 5.2% compared to April 2023, according to seasonally adjusted data.

Competition Is Fierce and Prices Are Rising

Thanks to the growing population, changes to borrowing costs, and record-breaking immigration and rent growth, the demand for homes is huge. Even with supply issues, sales activity continues to rise. The result? Buyers fighting over limited available inventory and prices that keep going up. The average selling price in May 2023 was $1,196,101, marking a small decline of 1.2% from the prior year but a 3.5% increase compared to April 2023, seasonally adjusted.

Housing Supply Issues

TRREB President Paul Baron expresses concern about Toronto's lack of housing inventory, a problem that has persisted for some time. Despite some government efforts to fix the issue in recent years, they have fallen short. A survey conducted by Ipsos revealed that residents of Toronto have given the local council a failing grade on housing affordability, and the shortage of supply is the primary issue. This issue isn’t limited to Toronto, as this critical situation extends all over the Greater Golden Horseshoe region. If we want to keep the economic development of the GTA, then housing supply challenges must be addressed to accommodate the growing population, or people and businesses may find a better opportunity elsewhere.

Conclusion

The GTA housing market is experiencing significant sales growth in May 2023, as people are desperate for homes. While this is great news, the scarcity of housing stock is causing prices to go up and fierce competition among buyers. Without concrete government solutions, the future of GTA could be in question. By increasing housing inventory and finding a balance in the market, the GTA can flourish contributing to a prosperous future for all.



** All the numbers presented in this blog post is outsourced from Toronto Regional Real Estate Board's Market Stat Report May 2023 Release.

For other TRREB areas, visit the Official TRREB article here:

Market Watch May 2023