Housing activity in the Greater Toronto Area took yet another hit in September as buyers continued to sit on the sidelines.
Sales for the month plunged 44.1 per cent compared to the same time last year, with 5,038 properties changing hands, the Toronto Regional Real Estate Board (TRREB) said on Wednesday.
All types of properties in both the city and the suburbs registered sales decreases ranging from 35.4 per cent to 53 per cent.
"September numbers are showing that the market has levelled off following the peak earlier in the year. We've all adjusted to the factors – increased interest rates, risk of recession – that have impacted the market and this is now the new norm," said Cailey Heaps, president and chief executive of Toronto-based Heaps Estrin Team, via email.
Fewer homeowners decided to put their properties up for sale. New listings were down 16.7 per cent in September year-over-year to 11,237, the lowest number of new listings reported in that month since 2002, the data showed.
"Sellers definitely need to be realistic about home prices at the moment. If they are stuck on getting pricing from the first quarter of 2022, they could be disappointed," Heaps said.
"Inventory isn't being moved in the way homeowners got used to during the pandemic so sellers aren't rushing to list their homes, especially in the central core of the city. And with the lack of strong inventory coming to market, it's creating a bit of a catch-22 because there are buyers looking to act but they still can't find what they're looking for."
The average selling price managed to edge higher to $1,086,762 in September from August, TRREB said, suggesting early signs that selling prices might have found a floor, though prices were still down 4.3 per cent on an annual basis.
The Greater Toronto housing market, like many markets across the country, has floundered since the Bank of Canada began aggressively hiking its benchmark rate. Since March, the Bank's key lending rate has jumped by three percentage points, lifting variable mortgage rates and some other debt.
As home sales activity continues to decline, Kevin Crigger, the president of TRREB, said it’s important for policymakers not to lose sight of the dearth of housing inventory.
“We must ensure that the temporary dip in housing demand is not allowed to mask the critical shortage of homes available for sale in the GTA. Candidates running in the upcoming Ontario municipal elections must ensure home buyers and renters have adequate housing options in the years to come,” Crigger said in a press release.
“Municipal council decisions have a direct impact on housing affordability, in terms of the protracted development approval processes, high development fees and other related policies that preclude timely housing development.”
Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.