Toronto

Greater Toronto Detached Real Estate Prices Rise On Low Volume

Greater Toronto real estate buyers were still confident in their purchases last month, despite pandemic. Toronto Regional Real Estate Board (TRREB) data shows sales made a big jump in March, despite a provincial lockdown. Despite the appearance of a sales boom, last month was still one of the slowest Marches on record. Even so, exuberant buyers sent prices climbing with the biggest increase since 2017.

Greater Toronto Detached Prices Make A Big Climb From Last Year

Greater Toronto detached real estate made big gains according to the benchmark price. The TRREB detached benchmark price reached $1,011,300 in March, up 9.56% from the same month last year. The City of Toronto detached benchmark is $1,209,800, up 7.99% from last year. Both the suburbs and the City performed well, but there’s some mixed signs of acceleration.

Toronto Detached Benchmark Price

The price of a typical detached home across the Toronto Real Estate Board, in Canadian dollars.

Source: TREB, Better Dwelling.

Predictably in this market, the benchmark price didn’t have a consistent acceleration. TRREB’s benchmark growth was higher than last month, and the highest since September 2017. The City of Toronto’s benchmark made its first deceleration since September 2019. This is only one downtick, so it could just be a step lower in a walk higher. However, since the benchmark tends to lag, it’s just as likely to be a sign of cooling growth. Unlike condos, the detached benchmark price is still below all-time highs.

Toronto Detached Benchmark Percent Change

The 12 month percent change of a typical detached home across the Toronto Real Estate Board.

Source: TREB, Better Dwelling.

The median sale price shows a much bigger climb, especially in the City. TRREB’s median sale price reached $955,000 in March, up 12.35% from the same month last year. The City of Toronto median sale price came in at $1,180,000, up 18% from last year. The rapidly rising median in the City implies a rising price floor. Which is the technical way of saying the discount for less desirable properties is shrinking.

Toronto Detached Average Sale Price

The average sale price of a detached house in the Toronto Real Estate Board.

Source: TREB, Better Dwelling.

The average sale price for detached homes is between the median and benchmark. TRREB’s average sale price was reported at $1,107,870 in March, up 12.50% from a year ago. The City of Toronto average sale price came in slightly higher with bigger growth at $1,465,826, up 15.64% from last year. Important to note this number is lower than the month before. This dynamic is typical in the City of Toronto, but not for the rest of TRREB. Both TRREB and the City of Toronto are significantly below the all-time high.

Toronto Detached Average Sale Price Change

The 12 month percent change of average sale price across across TREB.

Source: TREB, Better Dwelling.

Toronto Detached Sales increase, But Still A Slow March

Greater Toronto detached real estate sales are up from last year, but still slow. TRREB saw 3,760 detached sales in March, up 16.40% from the same month last year. The City of Toronto represented 833 of those sales, up 24.14% from last year. While that seems like a huge climb from last year, only two Marches have come in lower in the past decade. People have short memories though.

Toronto Detached March Sales

The total number of Greater Toronto detached sales made in the month of March.

Source: TREB, Better Dwelling.

More People In The City Listed Their Detached Home For Sale

Considering the province was under lockdown for half the month, new listings predictably dropped. TRREB saw 7,330 new listings in March, down 0.46% from the same month last year. The City of Toronto went the other way with 1,570 listings, up 9.71% from last year. This is consistent with what we reported earlier this year, that many GTA agents have been telling clients to hold inventory for the spring market. Although the city being locked down for half the month likely dampered the number of new listings.

Toronto Detached Sales Vs. New Listings

The total number of detached sales, compared to the number of new detached listings per month.

Source: TREB, Better Dwelling.

New listings didn’t fall all that much, but the rise in sales ate away at a lot of inventory last month. TRREB reported 6,459 active detached listings in March, down a massive 31.00% from last year. The City of Toronto represented 1,268 of those listings, down 27.54% from last year. Inventory is tight, but not quite as tight as it was during the 2016-2017 squeeze that sent prices soaring. Worth a quick mention is there’s a number of suspended and terminated listings this month. This could mean more people are waiting for the pandemic to clear up. If that’s the case, this delayed inventory would pop up later, adding to the usual supply.

Toronto Active Detached Listings

The total number of detached listings available.

Source: TREB, Better Dwelling.

Greater Toronto’s detached real estate market is seeing higher sales, lower inventory, and higher prices – but there’s a few footnotes. March’s sales volume is higher than the past two years, but still unusually low for the past decade – and not even close to 2017 volumes. Inventory is lower, but once again – not nearly as low as it was during the 2016-2017 price run. This means supply isn’t as tight as it was in 2017, but buyers are paying that level of price growth. This kind of volume disconnect isn’t rare in commodity markets, but it usually doesn’t mean what people think it does.

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20 Comments

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  • Reply
    Jacob Azim 2 months ago

    Remember, an immigration overhang is present. We’re hiking the number of people coming into the country, while unemployment is rising into the double digits.

    “filling” unfulfilled job demand, a.k.a. driving wage growth lower (or more likely negative on the other end).

    • Reply
      Lilly 2 months ago

      Wages and employment don’t matter. My Realtor said SaLeZ r Up.

    • Reply
      Trader Jim 2 months ago

      Immigration overhang was coming regardless due to connection of immigration and the business cycle. Per capita GDP losses already came in for two quarters. This is a technical recession when combined with job losses by most international definitions. **any** slowdown of immigration and there was a technical recession by Canada’s total GDP definition.

  • Reply
    Jason Chau 2 months ago

    A third of businesses needed debt to make their April sales, and another third (probably a lot of overlap) said a wage subsidy makes little difference.

    The biggest expense in Canada for most businesses isn’t wages, it’s rent. The longer the inefficiency persists, the more they need to devalue currency to get it to work.

    • Reply
      Dion 2 months ago

      Canadian dollar seems just fine. Most issues are baked in.

      • Reply
        Trader Jim 2 months ago

        That’s because of FX dollar swaps. Totally different issue. Onshore pressure is still very, so it would be hard to see Canada, with household debt this high, become more resilient and needing less monetary stimulus than the US.

      • Reply
        Brad 2 months ago

        Than you haven’t been watching FX. We swung from USDCAD 1.30 to USDCAD 1.47 back to USDCAD 1.40 all within the span of a few months. That is in no way normal or “fine” in the fx market.

    • Reply
      Ethan Wu 2 months ago

      Only because the WTO slashed their global forecasts going forward. Remember, everyone is celebrating the slowdown of COVID-19, but not thinking about how going back to work is going to work out for everyone.

      Hong Kong is having a second wave of infections now.

      • Reply
        Michael Li 2 months ago

        Hong Kong also has a lower rate of infection than Toronto, despite being a much more dense city with more testing. The power of effective government.

  • Reply
    renter 2 months ago

    Isn’t there a time lag before the sale prices are officially reported.

  • Reply
    Old Nick 2 months ago

    People open your eyes and ask yourselves… Do you really think that there is even the slightest bit of a chance that people can hold onto their businesses and mortgages for 1 – 3 months if this shutdown was to persists that long? Take a look South of the border at the 10 million job losses, and I believe that Canadians are filling for E.I. and forbearance periods with their financial institution to make ends meet on their overvalued homes which most couldn’t afford in the first place when things were “going strong”.. What do you recon that the average Canadian has saved, 500-1500$ and the average Canadian home valuation is in the 480K range.. Do basic mathematics we got taught in primary school… Small businesses and restaurant’s are going to get decimated leading to job layoffs, leading to foreclosures and ultimately a 30-50% decline in housing valuations amongst an abundance of other issues we should be concerned about.. How did your stocks perform over the past few months, well bad news it’s likely going to have a similar effect on your overpriced houses and condo’s… Best of Luck to all and my apologies for the BEARISH commentary, but let’s get real here..

    • Reply
      Joseph 2 months ago

      Nick, the thing that gets me is not simply the price. That’s fine. If a house costs alot, then it costs alot.

      BUT, the house better be built extremely well if I’m paying all that money. Have you seen these builds? The quality is awful. The workmanship for the (likely) majority of builds has been below average at best.

      The reason I’m willing to say ‘majority’ is because builds which are put up with less quality and workmanship can be completed at a much faster pace than a good quality home.

      To me, it’s not just high prices that makes this situation rough (for potential home owners). It’s also the inferior quality on many of these builds.

  • Reply
    Adnan 2 months ago

    I feel like I’ve been wrong in my reading of the real estate market over the last couple of years, just like most other bears who frequent this forum. Yes, the prices are out of whack and no, no one of median income can afford anything close to an entry-level home – but the price has never been governed by fundamentals. They were influenced by ultra-cheap credit and the free flow of global capital.

    The global capital flows will likely stem, but near-zero interest rates, an unprecedented fiscal stimulus and government purchase of mortgage debt imply that housing is too big to fail. That means the reversion to mean or at least some semblance of a return to fundamentals is unlikely to happen in the near term. Millennials and prudent savers will continue to be at a disadvantage.

    It’s ironic that the house-poor home-owners who took on unsustainable mortgage debt betting on an ever-inflating bubble may be better off than a renter who opted to stay out of the market to avoid getting entangled in irrational exuberance. But then, the world is fair, said no one ever.

    • Reply
      Patrick 2 months ago

      I’m not a bear or bull. I run a long-short portfolio. While of Canada’s genius investors lost 10 years of performance in a few weeks, my holdings spiked nearly 50%.

      Real estate outperformed over a 3 year span, but is highly illiquid. The majority of people that made “sacrifices” to own, are exposed to a single point of portfolio failure.

      If the long case is double digit unemployment doesn’t matter because rates are cheap, you are failing to understand basic risk assessment. Home prices have only increased once as a result of a cut – and that cut was due to a miscalculation mistake from Stats Can on GDP data.

      People are basing 4 years of performance, on a single segment of housing, like it’s the whole economy. You’re still down 10% if you bought at peak, but agents shifted the conversation to condos. “Don’t look at half the market. Just look at this one where the carrying costs and yield is negative.”

    • Reply
      Jutta Sapien 2 months ago

      Agreed, if there was any justice in this world Elvis would still be alive and all the impersonators would be dead.

  • Reply
    Joseph 2 months ago

    Supply and demand. That’s all it comes down to.

    Most people aren’t selling yet because they’re staying away from people + they need to get their heads wrapped around their finances + might have some money to last them maybe a month or two.

    Once the virus situation improves a little, expect those on the brink of insolvency to get their houses on the market.

    As soon as that happens, supply blows up and people start dropping prices.

    Don’t expect giant price haircuts, but there will be cheaper priced, better built alternatives for buyers in a couple of months than what’s on the market right now.

    • Reply
      6ix 2 months ago

      More than 30 % of the bankruptcies happen in the past few years is due to the ‘Divorce’ , home quarantine can amplify the divorce numbers and bankruptcies.

      In regards to housing all buyers know that, prices already gone down, sellers will realize that fact with a lag.

      • Reply
        Joseph 2 months ago

        So if all buyers know this, then what’s your thought on why houses are still selling at this rate? Are people simply looking for any excuse to give away their money instead of waiting a few months?

        • Reply
          Neo 2 months ago

          Look, they are a lot of idiots who sell first and and are forced to buy when that house nears closing. There are also people in that same situation but because big divorce. The husband usually rents but the mother buys a new house because they want that security if they have children. Any buyer with no existing obligations forcing them to buy right now who is out there paying top dollar in the middle of a pandemic recession isn’t very bright. .

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