The house at 2 Bettina Place in Whitby, Ont., was listed in late May and conditionally sold at the end of July, with the broker saying many buyers are choosier.amazingphotovideo.com
Many home sellers in the Greater Toronto Area are seeing their properties languish on the market for a frustrating length of time this summer, but shrinking supply and more confident buyers are pointing towards a tentative end to the price correction.
Unlocking pent-up demand among hesitant buyers is going to be the key to keeping the country’s emerging market recovery going, says Robert Hogue, assistant chief economist at Royal Bank of Canada, who sees a gradual but uneven path forward.
The early signs of stabilization in Ontario and British Columbia are encouraging, he says in a research report.
Mr. Hogue notes the Canadian Real Estate Association’s composite MLS House Price Index posted a flat performance in June compared with May, which marks the first time in 17 months the index remained unchanged.
In the GTA, the house price index edged up 0.3 per cent in June from May, which helped to bolster the national result. Sales in the GTA rose 1.4 per cent and new listings dropped 3.8 per cent in the same period.
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Sales and prices in Ontario and British Columbia have been hammered in the past few years as other cities have gained ground.
The house price index in the GTA dropped 5.4 per cent in June compared with the same month last year while sales jumped 9.4 per cent and new listings fell 12.9 per cent in the same period.
Mr. Hogue says lower prices, improving affordability and better job prospects in various parts of the country are slowly bringing more buyers to market and draining some inventory.
The economist cautions, however, that risks to a sustained rebound include a gloomy geopolitical picture, another energy price spike or renewed deterioration in the job market.
Even as supply in the GTA tightens, the buyer pool is also smaller than in years past, which means “days on market” can be lengthy.
According to digital real estate platform Wahi, average days on market in some neighbourhoods was an efficient six to 10 days in June.
In the same month in the slowest-selling communities, properties remained on the market for 50 to 126 days on average, according to Wahi.
Looking at the macro view, Wahi economist Ryan McLaughlin says the impact of a contraction in immigration at the same time many newly built condo units and apartments became move-in ready has strongly shifted market forces in the GTA and beyond.
“There has been this double-whammy effect,” says Mr. McLaughlin, as demand dried up while projects under construction have slowly been completed.
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Most newcomers to Canada settle in the GTA and Vancouver upon arrival, the economist notes, as permanent residents, temporary foreign workers, students and asylum seekers often gravitate to the largest cities.
In 2024, the federal government announced a sharp reduction in immigration targets as housing, health care and transportation came under pressure from rapid growth.
“It was a really dramatic policy reversal,” says Mr. McLaughlin.
As a result, Wahi data shows homes are slower to sell in many parts of Brampton, Ont., for example, which has a high proportion of immigrants.
Mr. McLaughlin notes that interprovincial migration is also a large factor as many GTA residents flee to Alberta and other provinces for employment and cheaper housing.
“They’re seeking out where the better price opportunities are,” he says.
Another cohort of buyers is young people starting a family for the first time, he notes. In some cases they are leapfrogging the Greenbelt that rings the GTA and heading for more distant towns and subdivisions such as Cambridge, Ont. and Kitchener-Waterloo.
In some cases, commuters are locating in areas with a GO Transit line into the city, but many also drive.
“When people do drive, they’re driving farther,” he says. “This COVID era has caused a lot of redistribution of where people are and where they’re driving from.”
Now that the big banks, the Government of Ontario and many companies are mandating that workers show up to the office more often, some people who moved to more affordable homes in outlying regions are moving closer to the core – if they can afford it.
One challenge is that homes in rural areas have become harder to sell, which in turn makes it harder for those homeowners to buy elsewhere.
“There are all of these confounding things happening at once,” says Mr. McLaughlin.
Wahi data shows the fastest-selling neighbourhood in the GTA last month was in the suburban 905 area code, where homes in Rouge Woods sold in an average of six days. The pocket in the northeast portion of Richmond Hill has highly ranked public schools.
In the 416 area code, the enclave of Wychwood Park posted an average of eight days on market in June, but the Heritage Conservation District has notably low turnover. The Sunnylea area in Etobicoke, where many small bungalows have been replaced with infill homes in recent years, saw properties sold in an average of nine days.
By contrast, the historic Weston neighbourhood in Toronto, which has a varied mix of upscale and low-income housing, saw properties linger for an average of 126 days.
The affluent neighbourhood of Deer Park in midtown also saw lengthy days on market, with an average of 67 in June.
In the suburbs, the relatively affordable Queen Street Corridor, just east of downtown Brampton, saw properties sell in 61 days, on average.
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Davelle Morrison, broker with Bosley Real Estate, sees buyers who want to move closer to jobs in the GTA after moving farther afield during and after the pandemic.
Ms. Morrison notes, however, that the search can be slow.
During the summer, house hunters often spend their weekends engaged in sports and social activities. They may only look at properties every second weekend, in some cases, and they are travelling long distances across the GTA.
In Whitby, Ont., Ms. Morrison listed a three-bedroom detached house with an asking price of $968,000 in late May.
The house with four bathrooms and a finished basement at 2 Bettina Place is move-in ready with a landscaped backyard, she says, and there are buyers circulating in the price bracket below $1-million.
Many buyers are indecisive, and they see little reason to rush, she says.
The house was conditionally sold at the end of July.
When Ms. Morrison asked for feedback from one set of buyers, they liked the house but commented that the backyard with a gazebo is too landscaped.
The backyard at 2 Bettina Place.amazingphotovideo.com
“They really want a backyard where kids can kick a ball around.”
The plentiful supply is allowing buyers to be choosy, she says.
For buyers, the end of summer is a good time to find a bargain in the single-family segment, she says.
“If they are on the market in August, they actually do want to sell. Go after those people and negotiate.”