Toronto housing sales dropped for a fourth straight month, but a shortage of available properties kept prices near the highs they reached earlier this year.
The number of homes sold in Canada’s largest metropolitan area in July dropped 2% on a seasonally-adjusted basis from June, bringing the number of sales to the lowest in at least a year, according to data released Thursday by the Toronto Regional Real Estate Board. New listings plummeted more than 30% from July 2020.
Prices still rose by 0.9% in July from the month before, also on a seasonally-adjusted basis. The average price of a detached home sold during the month was C$1.4 million ($1.1 million).
Housing supply is also an issue in Canada’s other major cities. Vancouver’s real estate board said new listings in July were 12.3% below the 10-year average for the month, while the number of sales and properties on the market also declined in Montreal.
“Many households are still competing very hard to reach a deal on a home,” Jason Mercer, the Toronto real estate board’s chief market analyst, said in a press release accompanying its report. “This strong upward pressure on home prices will be sustained in the absence of more supply, especially as we see a resurgence in population growth moving into 2022.”
Some of the drivers of Canada’s housing boom over the past year are starting to disappear. Pandemic lockdowns that boosted demand for larger homes have been eased and some mortgage rates have ticked up. That’s causing real estate players to look to the traditional driver of Canada’s housing market — immigration-driven population growth –to resume and support prices over the long term.
“There is a huge backlog of people seeking citizenship or permanent resident status in Canada,” John DiMichele, the Toronto real estate board’s chief executive officer, said in a statement. “This means ownership and rental market conditions will remain tight with upward pressure on prices for the foreseeable future. Policy makers at all levels must pursue a coordinated effort to bring on a greater diversity of supply in major metropolitan areas.”