toronto real estate

May 2021 Toronto Real Estate Market Report

May 2021 Toronto Real Estate Market Report

May 2021 Toronto Real Estate Market Report

Residential real estate transactions remained high in May 2021, but fell short of the 2016 record and were below this year’s March peak. Despite a slight ebb in sales over the last two months, market conditions remained tight enough to push the average selling price to an all-time record in May.

GTA Realtors reported 11,951 sales in May 2021 – more than double the result from May 2020, the second full month of the pandemic, when sales were far below normal. May 2021 sales were below the May 2016 record of 12,789 but remained well above the average May sales of 10,336 for the 2010 through 2019 period. Often, May is the strongest sales month in any given year; however, 2021 results bucked this trend, with May sales below the 15,646 deals reported in March.

There has been strong demand for ownership housing in all parts of the GTA for both houses and condos. This was fueled by confidence in economic recovery and low borrowing costs. However, in the absence of a normal pace of population growth, we saw a pullback in sales over the past two months relative to the March peak.

The MLS Home Price Index Composite Benchmark was up by close to 19% year-over-year in May 2021. The average selling price across all home types was up by 28.4% year-over-year, reaching a record $1,108,453. On a seasonally adjusted basis, the average price increased by 1.1% between April and May 2021.

While sales have trended off the March 2021 peak, so too have new listings. This means that people actively looking to purchase a home continue to face a lot of competition from other buyers, which results in very strong upward pressure on selling prices. This competition is becoming more widespread with tighter market conditions in the condo segment as well.

The housing supply shortage in southern Ontario has been well documented. Policymakers at all levels have acknowledged that supply is an issue. It is important to understand that dealing with this issue will be important not only for ensuring long-term housing affordability, but also the economic competitiveness of the Greater Golden Horseshoe. People and businesses are more likely to locate in regions that have an ample supply of affordable homeownership and rental options.

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