Toronto real estate is still trying to determine what it’s going to do next. Toronto Real Estate Board (TREB) numbers show mild improvements to prices in August. The market also saw sales rise in burbs, fall in the city, and inventory increased in both. The biggest takeaway however, is September sales were significantly below August. The decline is unusual, and could mean weaker than expected sales through the winter.
Greater Toronto Real Estate Prices Rise Over 2%
The price of a typical home moved just a little higher last month. TREB reported the composite benchmark hit $765,400 in September, up 2.02% from last year. The City of Toronto reached $841,700, up 6.74% from last year. Most of the gains were due to increases in the condo apartment segment.
Greater Toronto Benchmark Price
The price of a “typical” composite home across Greater Toronto.
Source: TREB. Better Dwelling.
The annual pace of growth is showing signs of improvement. TREB’s 2.02% annual increase is a slight improvement from last month. Ditto with the City’s 6.74% increase, when compared to last month. TREB has only been positive for two months now, so it’s probably best not jump the gun and call it a recovery.
Greater Toronto Benchmark Price Change
The annual percent change of TREB’s benchmark price for all home types.
Source: TREB. Better Dwelling.
Greater Toronto real estate saw the median sale price make substantial gains. TREB reported a median sale price of $670,000 in September, up 4.6% from last year. The City of Toronto median reached $660,000, up 5.6% from last year. Median sale prices aren’t useful for determining how much you’ll pay, since they aren’t adjusted for square footage or quality. They are still worth looking at, since they help give a better picture of dollar flow. The metric is also common outside of Canada, so it’s frequently used by international buyers.
Toronto also saw the average sale price rise across the board. TREB reported an average sale price of $796,786 in September, up 2.87% from last year. The City of Toronto saw an average of $864,275, up 6.81% from last year. Much like the median, the lack of adjustments mean this is only useful for dollar flow.
Greater Toronto Average Sale Price Change
The annual percent change of the average sale price of all homes.
Source: TREB. Better Dwelling.
Real Estate Sales Rise In The Suburb, and Fall In The City
Toronto real estate sales were mixed, depending on whether you were in the city. TREB reported 6,455 sales in September, up 1.91% from last year. The City of Toronto represented 2,468 of those sales, down 1.08% from last year. The most important note is that sales are usually higher in September compared to August. That didn’t happen this year, which means winter sales could be weaker than expected.
Greater Toronto Sales To New Listings
The number newly listed units per month, in contrast to sales.
Source: TREB. Better Dwelling.
Greater Toronto Real Estate Inventory Rises Over 5%
The number of newly listed homes for sale dropped across the board. TREB reported 15,920 new listings in September, down 3.33% from last year. The City of Toronto represented 5,456 of those new listings, down 4.81% from last year. The decline in new listings didn’t stop total inventory from continuing to move higher.
The number of active listings continued to grow in Greater Toronto. TREB reported 20,089 active listings in September, up 5.61% from last year. The City of Toronto represented 5,830 of those active listings, up 1.7% from last year. Inventory increased faster than sales, which explains the lower pressure on prices.
Greater Toronto Active Listings
The number of listings available for sale in May 2018, across Greater Toronto.
Source: TREB. Better Dwelling.
Overall, there were many improvements compared to last month. Prices are slightly higher, and the annual trend increased. However, the sales to active listings ratio continued to deteriorate. This typically leads to higher inventory, making it more difficult for prices to rise. Finance industry readers likely already noted that price gains are below inflation.
Like this post? Like us on Facebook for the next one in your feed.
Winter is here.
Literally? Because the drop wasn’t as significant for September as BD wants you to believe.
Huh? According to the chart there’s 5.6% fewer sales in September than August. Since September normally rises, that’s kind of a big deal.
Not really, the past couple of years sales have been flat going from August to September. Overall, it was a half-decent report for the first time since May.
Perhaps the biggest negative point was that average price of detached homes in the 905 actually decreased compared to the August/September period where it showed gains and in the 416 are the gains were muted compared to last year ($164k vs. $98k).
It’s too early to make a conclusion based on that metric alone but it could mean that we will touch new lows going into December/January. I also noticed a huge jump in listings in some areas starting October 1st.
Just last year the board said don’t worry about the worst August in decades, people hate buying in August. They delay until September. What happens when the second worst August in decades doesn’t see a September recovery?
2011 onward were slow years for Toronto real estate since rates were hiked, and there market was approaching 1990’s inflation adjusted highs. That’s why those years were lower.
Hm, can confirm – first August since 2013 to have more sales than September. That definitely needs more analysis, great observation.
Remember, in August the industry said that it was slow because everyone is waiting to buy in September. Rates are going to pop higher in mid-October, and disqualify even more people from buying their shiny new shoebox.
Wonder if that’s going to impact pre-sales projects that were holding off to launch in September.
Millennials need to stop whining and just buy. You’re splitting hairs over a few thousand dollars, and the chances are you’ll pay more by the time you’re “ready”
I don’t know. There has never been a real estate market that saw prices increase significantly while interest rates rise. The market is stagnant, and waiting for a significant exogenous shock factor.
Don’t drop such big terms on bulls right here, they likely won’t understand. Just say unrelated markets go boom boom, and income drops. Unless unemployment is going to magically stay at all-time lows, which it’s never, ever done in the history of employment trends.
The drop in unemployment also has to do with more people retiring, and the sudden shift to an older demographic. This means a greater tax burden on young people, to carry older low-tax paying, high service demanding Boomers. The have no liquidity, because young people will be stuck paying for their healthcare.
The stress test knocked out 15-20% of new buying power? And last month, detach went up 100k, condos 30k?
Just over 3 MOI detach
Under 2 MOI condo
Tight supply and demand = strength in the face of raising interest rate, stress test
Not bullish or bearish, but what you’re looking at is demand divergence. Fewer people are buying at higher prices, while inventory rises. It’s best not to look at year over year, but analyzed as trend-cycle over time. The market has literally turned into a Greater Fool market at this point.
Um. I think there’s a lag between the time when interest rates move and the impact is felt in real estate transactions.
At this point the 5 year Canada bond yield has climbed to ~2.45% and I can remember it being 1% mid way through2017.
https://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx
5 year fixed closed mortgages are priced as a spread to the 5 year Canada, so mortgage rates should be following along with the bond yield increases.
Although the impact of higher rates will hit buyers by reducing the price they can afford, my biggest concern is the impact of mortgage renewals into a higher rate environment sucking a lot of cash out of the economy. We have just pulled forward so much economic activity with this real estate frenzy that it’s inevitable that there will be payback in terms of reduced economic activity in the future as we eventually have to go through a deleveraging phase.
Still cheap RE in the east relative to the GTA, get in now before the gap catches up. Demand is shockingly strong. The rental market is in crises. Landlords just want to capture the high rent now and many have moved exclusively to Air BNB, because they are making a killing. So much even pricey downtown condos run cash flow positive.
Define shockingly strong. I’m curious, since I’m an agent not quite seeing the same thing you are apparently.
Maybe because you are competing against TREB’s 50,000 Realtors?
I look at months of inventory – sold vs active listing. Under 2 for condo, 3 for detach.
Considering the changes (b20, unfair housing plan, raising interest rates, high prices) I’m surprised demand is still this strong and remain bullish.
BMO Senior economist says it well from City News article:
“the GTA market remains soft but “continues to stabilize” after plunging earlier this year following the introduction of tighter mortgage rules as well as a foreign buyers tax and speculation fees on vacant homes.
“The market should remain on a steady footing in coming months as healthy demographic demand tempers the downward pull from rising interest rates,” Kavcic wrote.”
There you go. (although I disagree this is considered “soft”
Jungle, I figured you were getting your info from those RE jokers (banking economists/TREB/developers etc..)
And there you are, freshly quoting this banking economist who clearly has no clue what he is talking about. You do realize that they are big players in this game and will distort the truth!
Feel free to regurgitate their lies to yourself before going to bed, but please spare us this nonsense.
To be honest, I am having the best year of my career and have doubled my business from 2017 YTD. Mind you I focus mainly on Townhouse and MidRise opportunities and stay away from the pre-con business. From my experience working mainly downtown (South Of Eglinton to the lake and Leslieville to Parklawn/Lakeshore) I havent seen much a a decline in sales $. Condos are doing very well in terms of price per sqft. However there are hot and cold pockets in the Freehold market. I can only speak from my experience. Areas that have an established community or are near the end of their transitional period are seeing some healthy gains. Great examples are Leslieville, South Riverdale, Brockton Commons, The Junction Triangle, and Seaton Village. Many of my 905 Realtor colleagues have expressed their frustrations and struggle with the market out there but I have yet to see the same downtown. There is confidence again in the Toronto Market. The CAD is still cheap, businesses are looking to invest, and hopefully we can get our act together with infrastructure. I would personally stay away from the 905 and even some areas of the Boroughs for condos or investment properties. Its a better time to buy a freehold just outside of downtown unless you life demands downtown living then you’ll have to pay. I wouldn’t deny that a correction has happened. I believe it has especially in the outskirts. This “crash” that everyone has been talking about since 2012, I just don’t see it happening soon. 2023 will bring a lot more inventory so we will see then!
Sales in Toronto 2017 YTD (September) – 22,676
Sales in Toronto 2018 YTD (September) – 19,381
Either stop lying, or stop skewing facts. If your year has been better than last it is likely for reasons you haven’t provided. So unless you open your books for scrutiny, stop lying.
And format your block of text, you’re presenting yourself as a child.
You’re cute.
Sales stats as a whole do not reflect the sales of an individual. I’m sorry that you are bitter person and it hurts you to know that someone is successful during a time of uncertainty (at least for you) in this market. Do some research on the areas mentioned maybe you’ll learn something Johnny Boy.
Rofl.
It’s cute when Realtors try to dismiss a bad market, and simultaneously show they don’t have a clue what they’re talking about.
In 2012 prices were the same as 1990 when inflation adjusted. That means it couldn’t have been a bubble, at the same price 22 years later. In 1990 people priced in 22 years worth of growth. Today or tomorrow, you’re also likely buying on a forward valuation of 20+ years.
Jim you´re usually bang on with your comments but I don´t think your 2012 number is accurate. It was my understanding that 2006 was when inflation adjusted prices caught up to their 1989 peak, at least in Toronto. I think 2001 was the year they reached the peak without inflation adjustments.
At any rate, I agree with the main tenet of your post. I think we were entering bubble territory in 2012 but as things go with bubbles, they don´t usually burst as soon as you reach the territory. I think we would have seen a crash in mid 2014 if it wasn’t for BoC lowering rates and the subsequent crash of the loonie which made the market extremely attractive for foreign investors.
You’re cute…
and probably not the smartest. The sales as a whole does not reflect the sales of an individual. Think about that Johnny Boy. According to your stats we are down 3,295 in sales. Yet you have given no indication of pricing. We are approaching $1000/sqft in the core south of Bloor and pre-construction is starting at $1000-1100/sqft. Not to mention they sell 60-70% within weeks. You have also provided the stats for the city of Toronto including Scarborough, Etobicoke, North York, East York, and York. Maybe you should do some more research and learn something. I had mentioned Downtown Toronto and pockets nearby. My apologies that my formatting ruined your already sour day from your soil flavoured Timmy’s Double Double. You’ve presented yourself as a sour puss not willing to do their own research. An an ignorant forum rat who is really open to debating.
Watch all the paper people flee when they hear the match strike. Tick tock.BD4L.
BTW, sales data are available to everyone now so you can see how many people who bought in the past 2 or even 3 years have sold or are selling at a loss even in areas that only two years ago were absolute darlings for buyers.
“The sales as a whole does not reflect the sales of an individual.”
Then why bring up your individual experience into the discussion about the overall state of the GTA RE market?! You’re pretty much saying it’s irrelevant.
Prices don’t rise evenly and they don’t drop evenly, that’s in every RE market in the world. So, there were certainly some pockets in Toronto that needed to catch up to the price rises and at some point they will catch up with the fall.
Having said that, the core of big cities typically do much better in a price correction. That´s why prices in Manhattan didn’t experience anywhere near the price falls that Florida, Vegas or Pheonix experienced for example when the US RE market crashed. It was the same story in Madrid and Barcelona vs. rural Spain or smaller cities for example.
DUMP IT!