The Greater Toronto Area (GTA) housing market is showing signs it may have peaked in March.
The Toronto Regional Real Estate Board (TRREB) says 11,951 homes were sold in May, which is more than twice as many in May 2020 when a cloud of uncertainty blanketed the market. But sales fell 13 per cent compared to the previous month.
TRREB says May is usually the most active month. However this year, March was the busiest with 15,646 homes changing hands.
"There has been strong demand for ownership housing in all parts of the GTA for both ground-oriented home types and condominium apartments. This was fuelled by confidence in the economic recovery and low borrowing costs," said TRREB president Lisa Patel.
"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."
Home prices haven't come down
The downtrend in sales hasn't trickled down to prices yet. The MLS home price index rose 2 per cent compared to the previous month and is up 19 per cent on the year to $1,045,800.
The biggest year-over-year increases were in the suburbs and beyond. South Simcoe County was up 34 per cent, Orangeville was up nearly 30 per cent, and Durham rose 34 per cent.
Detached home sales continued to lead the way in the GTA and as a result, the average sale price increased 28 per cent to a record $1,108,453 but condos continue to play catch-up.
"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," said TRREB chief market analyst Jason Mercer.
"This competition is becoming more widespread with tighter market conditions in the condominium apartment segment as well."
Prime Minister Justin Trudeau expressed concern about the Toronto housing market in a speech Tuesday, where he said he would look at ways to address affordability.
"In Canada's largest city, it now takes almost 280 months for an average family to save for a downpayment," said Trudeau.
TRREB says policymakers addressing supply shortages are the path to affordability and help bring people and businesses to the GTA.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.