UNCERTAINTY WEIGHING ON HOUSING MARKET
Ongoing economic uncertainty, driven by tariff threats, has weighed on consumer confidence and impacted housing activity in March. Sales declined by 19 percent year-over-year, totaling 2,159 units. Sales slowed across all property types, with the steepest declines seen in higher-density segments.
“It is not a surprise to see a pullback in sales given the uncertainty,” said Ann-Marie Lurie, Chief Economist at CREB®. “However, it is important to note that sales still remain stronger than anything reported throughout 2015 to 2020, where our economy faced significant economic challenges and job loss. Nonetheless, easing demand has been met with gains in new listings and rising inventories, helping our market shift back toward balanced conditions, following four consecutive years where the market favoured the seller.”
March reported over 4,000 new listings, causing the sales-to-new-listing ratio to drop to 54 per cent, low enough to support further inventory gains. Total residential inventory levels reached 5,154 units, and the months of supply pushed up to 2.4 months. While this is a significant change from last year, with limited supply options across all property types and price ranges, conditions reflect a better balance between a seller and a buyer today. However, the market significantly varies depending on location, price point, and property type.
Improving supply has taken the pressure off home prices following the steep gains reported over the previous four years. In March, the unadjusted residential benchmark price reached $592,500, relatively stable compared to both last month and prices reported last March. Both detached and semi-detached prices remain consistent with peak prices and continue to rise, while apartment and row-style homes continue to report prices slightly lower than last year’s peak.
DETACHED
Detached sales totalled 1,035 units in March, a year-over-year decline of 10 percent. The decline in sales was met with improving new listings, supporting inventory gains over last year’s extremely low levels. The improving supply compared to sales has caused the months of supply to rise to just over two months, a significant improvement over the less than one month reported last spring. However, the months of supply continue to remain tight, with less than two months of supply for homes priced below $700,000. We are seeing a shift toward more balanced conditions for homes priced above $800,000.
The unadjusted detached benchmark price reached $769,800 in March, a gain over last month and over four percent higher than last year’s levels. Limited supply options continue to support price gains for detached homes, although the pace of growth has slowed from the double-digit gains reported last year. Some of the largest gains occurred in the City Centre.
SEMI-DETACHED
March sales slowed over last year’s levels, contributing to the first quarter decline of 11 percent. The decline in sales has also been met with a gain in new listings. While conditions still remained relatively tight over the first two months of the year, the boost in new listings in March relative to sales did support further gains in inventory levels, causing the months of supply to push up to 2.2 months, the highest monthly level reported since the end of 2022.
The shift to more balanced conditions is slowing the pace of price growth compared to last year. However, with an unadjusted benchmark price of $691,900 in March, prices are still over five percent higher than last year and above the unadjusted peak reached in July last year. Year-over-year gains ranged across the city, with he largest gains occurring in the City Centre and West districts.
