A surplus of homes for sale in the Greater Toronto Area (GTA) has led to more purchases as prices go down, data from brokerage HouseSigma suggests.

HouseSigma recorded 6,334 home sales in June, up by 3.1 per cent from a year earlier but down 2.8 per cent from May. Simultaneously, prices for all types of housing in the region fell. HouseSigma’s median June sale price in the GTA was $899,900, dropping 5.3 per cent year-over-year and 2.2 per cent from May.

Other real estate organizations have tracked the trends as well. The Toronto Regional Real Estate Board reported 6,770 home sales this June, a 9.4 per cent increase from the year before. (HouseSigma and the board have different methodologies for what classifies as the GTA.)

Royal LePage said the aggregate price of a home fell by almost five per cent year-over-year in the GTA to over $1.1 million, the real estate franchiser said in a recent analysis of the spring market.

This phenomenon is the residual effect of a market that is still adjusting to sellers “having certain expectations that might still be unrealistic,” while buyers have confidence, Sammy Kohn, a GTA real estate agent with Markham, Ont.-based HouseSigma, said in an interview with RENX Homes.

Buyers have the advantage today

Some home sellers in the GTA expect the region’s post-COVID pandemic housing boom to continue, Kohn said, referencing cases where bids went $100,000 over the list price. But such conditions are less relevant today, Kohn continued.

“The prudent sellers are ones that are looking at the market right now and understanding that really buyers have quite an edge, generally speaking, in Toronto.”

The GTA has a high inventory of housing and homes are being listed for longer on the market than before, so buyers know they have options. “There’s negotiating happening instead of rushing,” Kohn said.

In its analysis, HouseSigma used a sales-to-active-listings ratio, which calculates the number of home sales in a given month to the number of active listings. This June, it was 23.6 per cent in the GTA, compared to 18 per cent the year prior. HouseSigma found 26,826 active listings at the end of June, with 17,211 added in the month.

The data means an owner who listed their home this year had a better chance of finding a buyer than they would have a year ago.

The month-over-month decline in sales is due to the spring sales peak in April and May tapering off, Joannah Connolly, the head of content at HouseSigma, said in an email exchange with RENX Homes.

While there are still many questions about the economy in the minds of many Canadians, Anne-Elise Cugliari-Allegritti, vice-president of research and communications at Royal LePage, told RENX Homes there are still underlying strengths that are keeping the housing market active. Home prices are sliding, the labour market has been resilient and the Bank of Canada has been a steady force, she said.

Aligning with HouseSigma, Cugliari-Allegritti said buyers on the hunt for a new home do not feel pressure to purchase now because of such a climate, and feel freer to haggle and wait for their ideal home to show up.

Kohn’s tips to home buyers, sellers

Kohn advises home sellers to “not use anything over two-and-a-half, three years ago as a source of truth.” He urges such people to be “realistic” about the market and have expectations “that are aligned with what’s happening right now.”

Prospective homebuyers have great opportunities today, Kohn said. As of late, he often tells his clients who closed on a home: “you just got a great deal.”

Wild market shifts in the GTA are not on Kohn’s forecast until inventory “gets eaten up a little bit more.”