Active listings across the GTA surpassed the 30,000 mark in May for the first time in housing history. Total active listings finished the month at 30,964, marking a 13% monthly increase, a 42% yearly increase, and a staggering 89% above the preceding ten-year average for May. Despite this abundance of supply, buyer activity remained subdued, producing just 6,244 sales during the month, a pace that translates to approximately five months of inventory. While this dynamic suggests a market leaning toward oversupply, the average sales price across the region rose by 1% on a monthly basis, reaching $1,120,879. Despite the monthly increase, prices remain 3.84% below levels recorded at this time last year.
Recently, Prime Minister Mark Carney’s government introduced a targeted housing incentive aimed at helping first-time buyers in Canada’s most expensive markets. The new plan provides a full GST rebate on newly constructed homes valued up to $1 million, available exclusively to first-time buyers. This measure is designed to ease the upfront cost burden for those entering the market, particularly in urban centres like Vancouver and Toronto, where affordability remains a persistent challenge.
By raising the qualifying limit to $1 million, the federal government is aligning the rebate more closely with entry-level pricing in high-cost regions, offering meaningful relief on the purchase of new homes. While the overall market impact remains to be seen, the incentive is expected to stimulate activity in the new construction sector, especially for townhomes and condo properties that fall within the revised cap.
Home ownership costs are more affordable this year compared to last. Average selling prices are lower, and so too are borrowing costs. All else being equal, sales should be up relative to 2024. The issue is a lack of economic confidence. Once households are convinced that trade stability with the United States will be established and/or real options to mitigate our reliance on the United States exist, home sales will pick up. Further cuts in borrowing costs would also be welcome news to homebuyers,” said Jason Mercer, TRREB’s Chief Information Officer.
As the Greater Toronto Area continues to grapple with record-high inventory and cautious consumer sentiment, buyers remain firmly in the driver’s seat. While recent federal incentives may provide a boost to new home sales, the broader resale market is still adjusting to a more balanced, and in some cases, buyer-favouring environment. Unless confidence in the economic outlook improves and borrowing costs decline further, the market is likely to remain steady, yet restrained, through the summer months. For motivated buyers, this may represent one of the more favourable windows for negotiation seen in recent years.
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