Greater Toronto Real Estate Prices Are Down 5%, Sales Drop Over 20%

Greater Toronto Real Estate Prices Are Down 5%, Sales Drop Over 20%

Toronto real estate prices are split on where they should be heading. Toronto Real Estate Board (TREB) numbers show prices fell in May, but the city remained positive. The softer prices were largely due to declining sales, leaving more inventory unabsorbed.

Greater Toronto Real Estate Prices Are Down Over 5%

The benchmark price across Greater Toronto continues to see price gains fall. TREB reported a benchmark of $722,400, down 5.4% year over year. The City of Toronto reported a benchmark of $839,600, up 1.01% year over year. Prices in the city are being held up by higher condo prices, and dragged lower by falling detached prices. Despite the positive number, it’s currently lower than CPI’s 2%. So real (inflation adjusted) gains are looking negative so far.

Greater Toronto Benchmark Price

The price of a “typical” composite home across Greater Toronto.

Source: TREB. Better Dwelling.

The price growth taper shouldn’t be a huge surprise considering the massive gains last year. TREB reported year over year gains of 28.46% last May, so a few negative years to balance the market is realistic. The 1.01% rise is actually pretty high, considering the balance needed.

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 Median Sale Prices Are Down Over 4%

Growing mistrust of the benchmarks “qualitative” measures has people looking for the median sale prices, which are negative. TREB reported a median sale price of $675,000, a decline of 4.9% year over year. The City of Toronto had a median sale price of $669,300, a 0.8% decline year over year. Median sale prices are commonly used around the world, but aren’t adjusted for the space. Generally speaking, this number isn’t useful for determining how much you’ll pay. It’s only useful when combined with other market indicators for broad market direction.

Greater Toronto Average Sale Prices Decline Over 6%

The average sale prices of all homes fell, but less so that the month before. TREB reported an average sale price of $805,320 in May, a 6.6% decline year over year. This is higher than the 12.37% seen the month before, but it is light years away from last year’s 14.9% gain. Not unlike median prices, average sale prices aren’t great for figuring out how much you’ll pay. They’re a better indication of dollar volume, upgrade flow, and who’s buying.

Greater Toronto Average Sale Price Change

The annual percent change of the average sale price of all homes.

Source: TREB. Better Dwelling.

Greater Toronto Home Sales Fall Over 22%

Sales continued to slip for a second year in a row, but dropping by  more this time around. TREB reported 7,834 sales in May 2018, a 22.2% decline year over year. The City of Toronto booked 3,092 of those sales, a decline of 21.24% year over year. The decline across TREB follows a 20% decline last year as well.

Greater Toronto Sales Vs New Listings

The number newly listed units per month, in contrast to sales.

Source: TREB. Better Dwelling.

New Listings Are Down Over 26%, But Inventory Is Up Over 13%

The number of new listings declined across Greater Toronto, both across TREB and in the city. TREB reported 19,022 new listings in May 2018, a 26.37% decline year over year. The City of Toronto represented 6,306 of those listings, a 25.38% decline year over year. While that sounds like inventory is down, historic gaming of new listings has made this a pretty much useless indicator now.

The number of active listings, which are homes available for sale at month end, didn’t see that huge decline. TREB reported 20,919 active listings in May, a 13.21% increase compare to the same month last year. The City of Toronto represented 5,797 of those active listings, a decline of 0.54% year-over-year. The city is doing better the burbs with inventory, but its less than a point lower than last year. Last year around this time, TREB saw active listings leap higher.

Greater Toronto Active Listings

The number of listings available for sale in May 2018, across Greater Toronto.

Source: TREB. Better Dwelling.

Declining sales are leaving more inventory to build, especially in the suburbs. The seasonal month over month climb may sound encouraging, but at this point it’s a routine seasonal movement. Greater Toronto prices are so far charting a reaction rally, which is when prices retrace the movement at a lower level.

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  • Reply
    Ian 6 years ago

    “They’re a better indication of dollar volume, upgrade flow, and who’s buying.”

    How do you tell who’s buying using average dollars?

    • Reply
      Bluetheimpala 6 years ago

      The mean is distorted by outliers while the media is literally the middle point. Easy example:
      5 5 8, mean 6, median 5
      5 5 5, mean 5, median 5
      Ipso facto, scenario 1 has more higher-end buyers which is shown in the higher average. Conversely if it was lower it means more $$$ is going south.

    • Reply
      Trader Jim 6 years ago

      Higher average, more rich people in the market and upgrades. Lower average, more entry level people moving into the market. When it moves lower, you have entry-level buyers. Same as the stock market, when you see a lot of small retail buying, it’s time to start dumping. You’ve hit peak.

      Smart money and dumb money basically, no offense to either. Smart money isn’t necessarily handled by smart people, it’s just early buyers vs “dumb” buyers which are late.

  • Reply
    Mac 6 years ago

    Bahahahahaha! I like that BNN and the CityTV had clowns (agents) talking about how the market is recovering yesterday, because it rose 5 months in a row. They didn’t mention that it retraced UNDER last year’s market. If you were flipping, you would have lost money from last year to this year. End of story.

    It’s going to be funny when these little details finally hit the regular market, and the panic selling ensues. Do you think the reason they’re pumping right here is because they’re selling their own homes/recommending it to their best clients? It’s a pretty common move in the stock market, for a fund to talk their book while selling.

    • Reply
      Bluetheimpala 6 years ago

      They would’ve sold last year most likely like a number of banking/finance execs. What TREB is doing is trying to justify its existence. TREB is a cancer in the industry; they need more agents to pay more fees and keep them relevant so a downturn in RE means less bank. They are basically the worst union in the world as they offer nothing back (other than an antiquated listing system) and worse don’t even regulate the level of talent so an ‘agent’ ranges from “your brother who got his license last year so he could save a few buck on his house” to a 30+ year professional. Classic pimp-hoe relationship…they us guys like Frank Sinclair and Sam McDadi to sell the dream when 99% of it is working the block and hoping you don’t get stabbed.

  • Reply
    Justin Thyme 6 years ago

    In Dec. 2014, 15,and 16, when listings turned around and went up, sales followed in the following months.

    In Dec, 2017, listings went up as expected, but sales kind of stalled. It is a very different pattern.

  • Reply
    SUMSKILLZ 6 years ago

    Too bad there is no metric for: successful bid, but financing condition was not met. That is all I hear at work and in my neighbourhood. Folks can’t get the sale because a bank thinks the house is worth less than was the successful bid.

    • Reply
      Bluetheimpala 6 years ago

      Can vouch for that. Seen a deal fall apart twice. Downtown condo in the $700K range. Banks spend millions on analysts. Most people use their ‘Uncle Tony’ for RE analytics. Not saying Tony isn’t a wealth of economic, demographic and psychographic info but….

  • Reply
    vnm 6 years ago

    When this occurred in the last bubble bust the prime rate went went from 10%
    to 6% between 1990 and 1993, now it’s happening with rock bottom interest rates that have nowhere to go but up.

    • Reply
      Bluetheimpala 6 years ago

      And that’s the rub…if we had 200-400 bps the play with then we could fuck around a bit but we don’t. Fed is going to raise twice this year (if they do we’re lagging now) and BoC has everyone priced in for June and Oct. I honestly believe Poloz’s cooling of the hikes was a warning for the rational/responsible Canadians who see the pain coming.

  • Reply
    NJ 6 years ago

    its funny when you read TREB’s report complaining about lack of inventory, so govt needs to increase the supply. my question given this market for past one year that couldn’t sell even half of its newly listed houses each month, there is no question of lack of inventory and these guys are playing pure drama that no one would listen. GREED AT ITS PEAK. Greed is working overtime to make the crash even worse.

  • Reply
    Beh G. 6 years ago

    I don’t think it makes a lot of sense to compare the numbers to May 2017 since that was an aberration, so let’s look at how they compare to GTA data from 2016:

    * Sales down 39.2%
    * New Listings up 9.2%
    * Active Listings up 61.8%

    Not exactly encouraging numbers but even worse is a metric that I’ve been following for a while and it’s the ratio of sales to new listings relative to active listings. It basically measures the absorption rate relative to the unsold/available inventory .

    This metric has been correctly predicting the activity and prices in the GTA market 2 to 5 months in advance (depending on seasonality). It has been falling since December and it’s now at the lowest level on the data points I’ve collected (back to September 2015). The last time the ratio was slightly above this level was June 2017 and the market hit its bottom in August 2017.

    • Reply
      Rob 6 years ago

      Thanks! I also think these numbers are much more useful.
      Anyone has numbers for 2015 to compare?

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