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Home sales and average selling prices in the Greater Toronto Area (GTA) during June 2023 remained higher than last year. However, there was a slight dip in sales compared to the previous month when considering seasonal adjustments. The average selling price and the MLS® Home Price Index (HPI) Composite benchmark also increased compared to the previous month.
Despite higher borrowing costs, the demand for owning homes is stronger than the previous year. However, home sales were somewhat affected last month due to uncertainty surrounding the Bank of Canada's view on inflation and interest rates. Additionally, there were not enough available homes for sale, which prevented some potential buyers from making purchases. In simple terms, if there are no homes on the market, people can't buy them.
In June 2023, there were 7,481 home sales in the GTA, which is a 16.5% increase compared to June 2022. However, the number of homes listed for sale decreased by three percent during the same period. This means that the housing market was tighter last June than it was the previous year. The average selling price went up by 3.2% to reach $1,182,120. Though the MLS® HPI Composite benchmark still showed a 1.9% decrease on a year-over-year basis, it was the smallest annual decline in 2023. But when looking at month-to-month figures, the average selling price and MLS® HPI Composite benchmark increased.
Factors such as a strong economy, a tight job market, and significant population growth contributed to keeping home sales above the lows seen the previous year. Looking ahead, the Bank of Canada's interest rate decision and its guidance on inflation and borrowing costs for the rest of 2023 will help us understand how sales and prices might recover from their current levels.
The GTA municipalities are struggling to build enough new houses to keep up with the growing population, which has led to a housing supply crisis. The government at all levels, including the newly elected mayor of Toronto, have committed to addressing this issue. The lack of available listings and high taxation and fees related to home sales and construction are also affecting housing affordability.
To address these challenges, it is essential to consider all the factors that influence people's ability to own homes, including taxation and household financial situations. Taking these aspects into account will help ensure that everyone has a chance to find suitable housing.
Georgina Market Watch 👇
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