It’s been more than a few years since Greater Toronto’s real estate professionals have felt disappointed with a spring selling season; in recent years the reaction has been closer to astonishment as the region hit one new record after another.
But this spring is shaping up differently. Chalk it up to an unusually rainy season; or concerns about the provincial Liberals’ new housing rules; or the federal Liberals' new mortgage rules last fall; or maybe just plain old buyer exhaustion — but things are changing in Toronto’s (formerly?) red-hot housing market.
And while there's little chance of the region's housing market suddenly becoming affordable overnight, there is reason to believe that in the months to come, it may be a little easier to buy a house in Greater Toronto, and a little harder to sell one.
Here are four signs that Toronto’s housing bubble is beginning to deflate.
1. Sales are down
Home sales fell 6.7 per cent from March to April in Greater Toronto, and for the first time since 2013, they are down from the same month a year earlier, according to data released Monday by the Canadian Real Estate Association.
2. New home listings have soared
There has been a sudden, sharp spike in the number of homes available for sale in Greater Toronto. It appears homeowners are taking advantage of rapid house price growth to cash out of the Toronto market.
There were 21,630 newly listed homes this April in the region, compared to 16,252 in April of last year — up more than 33 per cent in a year.
It’s particularly pronounced in single-family homes. The number of those on sale soared by 50 per cent this April to its highest in at least five years, according to an analysis by Better Dwelling.
TD Bank economist Diana Petramala says that spike in listings has brought Toronto's market "well within balanced territory" — that's a big change from just a few months ago, when most market observers agreed Toronto was a "seller's market."
3. Buyers are hesitating
After years of a growing frenzy in the housing market, Greater Toronto realtors say they're seeing signs of buyers pulling back from the market.
“Sometimes properties are not selling right away,” Royal LePage realtor Elli Davis told The Globe and Mail. “Some are still a week. But some of them now I am seeing over 14 days, 20 days.”
“I would not say this market has fallen apart or anything like that,” she added. “I think it is just normalizing and levelling off.”
That’s a fairly different tone from the one seen in previous spring selling seasons, when realtors were declaring a housing shortage as properties were snapped up amid panic buying.
4. There’s been a spike in searches for “housing bubble”
According to Google Trends, searches for “housing bubble” have spiked in Canada in recent months to their highest level ever.
That might be a sign people are losing faith in house price growth. A similar jump in searches was seen in the U.S. prior to the burst of its housing bubble.
"Housing bubble" searches spiked in the U.S. in mid-2005, as house prices were growing at a fever pitch. Within 18 months, the U.S. market was seeing falling house prices, and search interest in the term “housing bubble” was on the decline.
Coming Soon: The Home Stretch
Our weekly newsletter delivers the news and analysis you need on Canada's housing market. Sign up below and don't miss the first issue.
Also on HuffPost