Home prices are marching back upward in the Greater Toronto Area (GTA), registering the third straight month of gains following a turbulent period that saw the cost of a home decline in seven of the ten months between May 2022 and January 2023.

The latest housing market report from the Toronto Regional Real Estate Board (TRREB) highlights shifting conditions, including another consecutive month of increasing home prices in May 2023, and signs that intense competition has returned among buyers after slipping last year.

First and foremost, housing prices are once again up on a seasonally-adjusted basis, rising 3.5 per cent over April 2023's figure to an average of $1,196,101. That figure sits 1.2 per cent lower than May 2022 housing prices, however, it brings investors closer to the break-even point following a turbulent stretch of price declines over the last year.

"The high cost of housing, brought about by short supply and high borrowing costs, is part of the broader increases in the cost of living," said TRREB CEO John DiMichele, continuing, "Municipalities, including the City of Toronto, need to be mindful of this when considering their revenue generation options."

"TRREB believes households will have little patience for higher taxes, including unreasonable property tax hikes and increases to prohibitive upfront land transfer taxes," added DiMichele.

May was also a big month for home sales, with just over 9,000 reported in the region last month for an impressive 24.7 per cent leap over the previous May. Month-over-month, sales were up by 5.2 per cent since April 2023.

"The demand for ownership housing has picked up markedly in recent months. Many homebuyers have recalibrated their housing needs in the face of higher borrowing costs and are moving back into the market. In addition, strong rent growth and record population growth on the back of immigration has also supported increased home sales," said TRREB Chief Market Analyst Jason Mercer.

The problem with this surge in sales is that new listings plummeted by almost 19 per cent in this period, an imbalance TRREB is blaming, at least in part, on the City.

TRREB's new President, Paul Baron, has harsh words for the local municipal government, which he claims has "been failing on the housing supply front for some time."

"Recent polling from Ipsos found that City of Toronto residents gave Council a failing grade on housing affordability and pointed to lack of supply as the major issue. This issue is not unique to Toronto. It persists throughout the Greater Golden Horseshoe." said Paul Baron.

Jack Landau (BlogTO, June 2,2023)