Greater Toronto real estate may not be much more affordable, but it’s a lot easier to find a new home. Altus Group and BILD GTA data show a lot more new home inventory in September. The market is also seeing fewer new home sales, and lower prices for detached home… but higher condo prices.
Greater Toronto New Condo Prices Are Up, Detached Prices Down
The price of new home across Greater Toronto is split, depending on what you’re looking for. The condo benchmark price reached $789,643 in September, up over 19.4% from last year. The benchmark price of a single family home fell to $1,119,533 in September, down 7.1% from the same time last year.
Greater Toronto Sees Fewest September Home Sales Since 2008
The total number of new home sales across Greater Toronto are down, but higher in the City of Toronto. Total GTA sales reported were 1,747 in September, down 21.62% when compared to the same month last year. The City of Toronto represented 1,212 of those sales, up 10.18% from the same time last year. Both measures are low for historic norms, but GTA sales are the worst September since 2008.
Greater Toronto September New Home Sales
Total September new home sales in Greater Toronto.
Source: Altus Group, Better Dwelling.
Greater Toronto New Home Inventory Rises Over 16%
Greater Toronto real estate developers have you covered if you’re looking for a home. There were over 13,952 new homes for sale in September, up 16.3% from the same month last year. Breaking that down, condo apartments represented 8,820 of the listings, down 6.06% from last year. Single family homes represented the 5,135 of the listings, up a whopping 96.96%. Basically, there’s fewer condos but a lot more detached homes available for sale. Who wants to live in a house with a yard, and stuff though? *shudders*
Greater Toronto September New Home Sales By Region
Total condo apartment sales in Greater Toronto for September, by region.
Source: Altus Group, Better Dwelling.
New Home Sales Are Nearly A Buyer’s Market
The number of sales to active listings slipped lower. The ratio reached 12.52% in September, down from 18.58% during the same month last year. Generally speaking, above 20% is a seller’s market, below 12% is a buyer’s market, and between 12 to 20% is a balanced market. In a seller’s market, prices are expected to move higher. In buyer’s market, prices are expected to go lower. In a balanced market, prices are just right. The ratio should remain in the market for a few months before the impact is expected.
Greater Toronto September New Home Sales To Active
The ratio of sales to active listings for new homes in Greater Toronto, for the month of September.
Source: Altus Group, Better Dwelling.
Population growth isn’t tapering, but liquidity seems to becoming an issue. Home prices aren’t budging either, in fact they’re higher for condo apartments. However, sales are falling fast, and inventory is building. The question is who will flinch first?
Home prices aren’t getting more affordable, so buyers may be hit with another round of FOMO. At the same time, that may not matter. Rising interest rates and tightening credit makes it difficult to absorb existing prices. You can fawn over a home all you want, but that doesn’t mean you can get a mortgage for it. Don’t expect rates to fall either. If they do, it means we’ve been hit with a large deterioration to fundamentals. That’s a whole other set of problems that are much bigger than owning a condo.
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Worth pointing out that 2015 we were facing a recession, and they cut interest rates. Probably why the rate of absorption popped so much higher in 2016.
Immigration. Chinese buyers are snapping up anything they can get their hands on, if you want to skip buying, go for it. You’ll end up buying from them later.
Later, I’ll be buying their note for pennies on the dollar when most of them have disappeared while running from their obligation in this country. Sadly, the Canadian taxpayer is going to swallow the loss
Exactly! Buy now before interest rates rise even higher and you’ll be locked out for eternity!! Chinese people are buying everything left, right and center and soon they will own your children! We’ll all be a slaves to the Chinese! FOMO FOMO FOMO!
Oh my, the lengths realtors will go to…
The fact is sure we’ll end up buying from them later, and by the sounds of it from you too, but at a much better price point. I won’t flinch first 😉
Housing market as any other markets have cycles. We are now in the denial phase of the cycle. Capitulation is the next phase. Let’s wait and see….
Are you having trouble selling your overvalued property?
Hi Lo, not sure how connected you are back home buuitt…Xi is done with his colonial-esque ‘capital expansion’ allowing the princelings to spread out and build influence. It never works in totalitarian regimes because, well, people want to get the fuck out with their cash. the idea of getting pulled out of your bed in the middle of the night and tried for ‘corruption’ just because you don’t ‘follow the rules’ is scary for rich people; it is the only this challenging their paradise. The middle east doesn’t even attempt it because shit, they need all the cash they have to stop imploding, lol and they can’t even give a semblance of liberalization. Also the word is out that Canada is vilifying the chinese over RE so there is little demand for canada. Annnnd, Xi is hell bent on getting his money back and is basically working with our government/banks to reign it in. Whatever chinese money left here in the next 6-12 is dead money, sold out by the higher caste/class chinese as they exit. There is a culture of patronage and familial commitment in china; if someone well off offers you an opportunity you take it. Heck, your brother on the mainland could’ve gotten into a deal that makes you HAVE to buy a $4MM mansion in BC, no choice. Buuut that $4MM will go to $2MM so while you’re correct that the chinese will sell, they will take a massive hair cut and account for it at home. Tick tock. BD4L.
As interest rates get higher, these are going to be even hard to buy. We’ll have a class of serfs that will never own, just like in Hong Kong.
which is the norm, in 99% of time in human history…
majority of land are owned by a handful elites.
this middle class thing is a rarity and seems to be short lived.
Right, mmhmm Toronto is a world class city just like Hong Kong. Buy now or forever be locked out! Don’t make enough money to qualify? go to a subprime lender, sell your kidneys, sell your first offspring! Whatever it takes BUY NOW, especially from Rob; he’ll even give you a kick-back on his commission.
Have you considered that Hong Kong probably felt like this 20 years ago?
Have you considered that Toronto DID feel like this in 1989? Oh ya I forgot “This time it’s different”
I’d go further … it’s even more 1989 than 1989.
Vnm – this is so meta, I gotta sit down. Tick tock. BD4L.
In my opinion, housing market as any other markets have cycles and we are now in the denial phase of the cycle. Capitulation is the next phase. Let’s wait and see……
Condo market in Toronto, specially Downtown will be absolutely fine. Condo foreign buyers were very small percentage. Majority of condo buyers in Toronto are local people – baby boomers, parents trying to reserve the unit for their kids, immigrants, high paying professionals and millennials. Downtown Toronto is area in high demand, supply is low and will not catch up with demand. Series of 2-3 hikes of interest rates will not kill the condo market in Toronto. Soon you will see prices increasing further – wouldn’t be surprised to see projects with 1500 dollars for square feet. Let’s wait and see who is right my blue Bears.
You need to learn some fundamentals. Every market decline, some call it a crash, always and I repeat ALWAYS start with a high end segment. 3M+ market started slipping back in late 2016. Next comes suburban detached and semi-detached inventory which picked in Q2 2017 and ultimately the cycle ends with the cheapest and most accessible segment … condos. Only fools will think condos will be spared. Buckle up!
I agree 100% with your comments.
Crazy Talk!
Lets see – sales are down, interest rates are up, credit is getting tighter by the day and what this tells you is that – condo prices will rise ! wtf
Well with sound thinking like that if I were you I would start buying every condo in site, 1500 per square feet is just around the corner.
lol, I Iove this shit, I hope there is more sound thinkers like you. Hurry and buy before all the inventory is gone.
Now that we have the subjective take, now for the objective take.
40% of condo buyers that took possession in 2017 in Toronto are renting them out for negative cashflow. 10% are using private mortgages. Prices need to rise at least 8% for them to break even on just the loan rate, without having to top it up.
I don’t know if you’re old enough to remember the early 1990s, or you’re so old you’ve forgotten them, but these are the exact discussions that occurred back then. Everyone went in and rented out condos for negative cashflow.
They assumed that high levels of immigration (they had just raised the immigration target as well), would hold up prices and cause depreciation. They lost money, until the banks told them it was time to stop losing more money. This was one of the very few times that Canadian immigration slowed. No one wants to move to a depressed economic area, and it was one of the few times rents had to decline in Toronto.
Thank you for sharing this information. The premise is that history tends to repeat itself.
A colleague only payed up her financial collapse in 1992, in 2013. She lost two condos at the time to the banks. It took twenty one years to get fully debt free. She now lives credit free as well.
Canadians were lucky to have almost 20 years of prosperity but this also means that the younger generation did not live through the 1989 real estate crash. This lack of experience makes new entrants believe that prices will continue to go up forever which in turn helped contribute to this real estate bubble.
Treating homes as financial instruments is dodgy.
I’d tell young people (newer buyers) that many homes today are not worth the price they are selling for, and to only buy what they can really afford and use, and then also prepare to invest and save in other ways.
Easy for me to say that 16 years after buying in, but still I was always a bit cautious and mistrustful of staking too much financial leverage in an asset for which valuation I have so little control over. Debt is not casual.
I agree 100%. It took 22 years for some buyers to recover the money they have invested buying a property in the peak of 1989. We are in the denial phase of cycle now. Capitulation phase is the next phase.
What supply shortage?! Did you not just read the article that said in the past year we have gone from just over 5 months of inventory of new homes to 8 months of inventory?! That´s called a supply glut not shortage!
These general stories about the GTA don’t reflect whats happening in downtown Toronto or in areas that have existing transit/subways.
On a blog that covers the impact of macro and credit markets on real estate, you’re complaining that they don’t write about an issue that impacts 2% of the city’s housing? What about Totonto’s Condos emails!
Sorry to say this, but even though it says it’s about real estate, they aren’t trying to sell or deter you from buying anything.
I think you are in the Denial stage.
“Greater Vancouver Real Estate Prices Are Up Just 1%”
Not at all..
Ross Kay debunks this average price con by explaining that monthly prices are a measure of how much the buyers that month had to spend, not how much each individual home increased or decreased.
Example: One month, a whole bunch of buyers decide to buy Cadillacs, more than usual. So the “average price” of cars sold goes up that month. Does that mean all the Chevrolets are now worth more?
Of course not.
The next month everyone decides to buy Yugos, so the average price declines. Get the idea?
What matters is apples to apples, same house to same house, and that kind of data isn’t given out by the organized real estate crowd.
But Ross Kay has it, and says prices in Vancouver are plunging. 20% minimum drop in detached.