Toronto real estate sales are still slowing, but buyers are still bidding up prices. Toronto Real Estate Board (TREB) numbers show condo apartment prices reached an all-time high in March. The record high for prices came with a six year low for sales, and a three year high for inventory.
Toronto Condo Prices Reach A New All-Time High
The price of a typical condo apartment reached a new all-time high. TREB reported the price of a typical condo hit $522,300 in March, up 7.17% from last year. The City of Toronto reached $554,300, up 7.87% from last year. The gains are at a multi-year low, but still very high.
Toronto Benchmark Condo Price
The price of a “typical” condo apartment in Toronto.
Source: CREA, Better Dwelling.
The annual pace of growth for the benchmark continues to taper, but is still large. Annual growth fell in both TREB and the City of Toronto for sixth consecutive month. Growth, while still very large, was last at these levels in Feb and June 2016, respectively. Note both the composite and detached benchmark prices have detached from other indicators. This may be a sign of seasonal adjustment distortion from the abrupt change to low volume.
Toronto Benchmark Condo Price Change
The annual percent change of price, for a “typical” condo apartment in Toronto.
Source: CREA, Better Dwelling.
The median sale price of condo apartment also spiked to a record high, but posted smaller gains. TREB median condo sale price reached $510,000 in March, up 5.15% from last year. The City of Toronto reached $548,000, up 5.79% from last year. TREB’s median is 2.35% below the benchmark, and the City is 1.35% lower. This means more than half of condos were sold 2.35% and 1.35% below the benchmark. The gap between the median and the benchmark is closer than other segments we looked at. However, it still leaves us with a lot of questions about the adjustments made to benchmarks.
Toronto Median Condo Sale Price
The median sale price of a condo apartment in Toronto.
Source: CREA, Better Dwelling.
The average sale price of a condo is showing much lower growth. The TREB average condo sale price reached $560,020 in March, up 1.63% from last year. The City of Toronto reached $603,969, up 2.33% from last year. The average sale price is very volatile, and is best used as an indicator for dollar flow.
Toronto Average Condo Sale Price
The average sale price of condo apartments in Toronto, and the suburbs.
Source: CREA, Better Dwelling.
Toronto Condo Sales Fall To 6 Year Low
Condo sales across Greater Toronto reached a multi-year low for the month. TREB reported 1,965 sales in March, down 9.98% from last year. The City of Toronto represented 1,349 of the sales, down 14.24% from last year. The decline puts sales of condo apartments at the lowest level since 2013. Sales are back to pre-interest rate cut levels, just with much higher debt levels.
Toronto Condo Sales Vs. New Listings
The number of condo sales, vs newly listed condos per month in Toronto.
Source: TREB, Better Dwelling.
Toronto Condo Inventory Highest Level In 3 Years
New listings for condo apartments across Greater Toronto are falling. TREB reported 3,242 new listings in March, down 1.9% from last year. The City of Toronto represented 2,221 of those new listings, down 0.17% from last year. The drop in new listings did not result in fewer listings, however.
Active listings, total inventory for sale, reached a multi-year high for condo apartments. TREB reported 3,223 active listings in March, up 7% from last year. The City of Toronto represented 2,107 of those listings, up 13.64% from last year. The total number of units are the highest listed for March in 3 years, but still are still relatively low. The number of units do not include booming pre-construction, showing poor absorption.
Toronto Active Condo Listings
The number of condo listings available for sale in Toronto.
Source: TREB, Better Dwelling.
Greater Toronto condo sales are falling, inventory is rising, and prices are at a new all-time high. The decrease in relative demand is helping to slow price growth, which fell to the lowest level in years. However, even at this level of growth – price growth is very high, according to the benchmark.
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Can you elaborate more on the seasonal adjustment distortion?
Seasonal adjustments make winter numbers higher, and summer numbers lower. You can see the distortion over the past few years, as inventory drops. Either Jan to April is the best time for appreciation (unlikely), or they can’t figure out analysts need to help fit a curve when volume drops off.
This is a big problem if they are miscalculating seasonal adjustments in the winter, because it influences spring pricing. If this was any other industry, wouldn’t this be grounds for a class action lawsuit?
lol. There’s a reason Chinese agents call the benchmark price “frankenstat.” It’s too opaque to make any real decisions on. They aren’t even using sales pair analysis like Teranet National Bank index. It includes qualitative measures, such as exposure. It’s feng shui for money, which is embarrassing to see used in a developed country.
Chinese agents never use them, because there’s an inherent skepticism with that class of investor. Note I said investor, not someone just looking to get their money out of China. The former makes decisions about return, and cares about an exit. The latter does not care about the exit, but cares about circumvention of capital controls.
Less than one in ten new condos are being sold, but 60% of today’s inventory is being sold? Glad to see poor people providing liquidity for rich people isn’t just for the stock market anymore.
The days of big gains are definitely behind us, but I expect prices to return to normal for condo price appreciation. Around 5% per year for the foreseeable future is what I’m expecting.
That’s what you’re getting from this, appreciation at more than twice the level of inflation in the future? Come on.
Chicago’s condo prices peak-to-through was 39.5% when the bubble popped in 2006 (bottom was reached in 2012, source : St-Louis Fed Condo price Index). I’d be shocked if it doesn’t go down 20% overall three years from now for Toronto.
Yes, a 20% correction will bring us back to January 2017 prices, makes sense.
the luxury condo market — peaked in 2011 and fell 20%, before starting to rebound in 2015/2016 — so yes, your 20% pullback makes sense for the overall market…
no chance it drops 20% on average for condos in toronto. millenials need a place to live and you think they have the patience to wait for a 20% correction? soon as market softens up even close to 10% the condos will be bought at ‘discount prices’ and stabilize before running back up. don’t hold your breath for a lengthy crash in condo market..
Of course, because that’s always what happens after a major run-up in prices. 🙂
I can think of only 2 ways to reconcile these figures.
The first is that the “benchmark” figure is concocted to meet theTREBs objectives and bears no relation to reality.
The second is that the bottom is not going to fall out quite yet, because idiots are still piling in to the “melt up” in prices that always comes before the melt down.
I suspect that both may be true and that some time in the next few months the condo market is going to turn ugly, probably when the glut of new units starts to close.
Buckle up tight as history repeats itself once again.
What I’ve observed in the last 18 months regarding the bubble of everything is that there are leading and trailing indicators which are being manipulated to maintain the growth narrative. Think stock but backs, massive domestic consumption of UST, global QE in a range of flavours and overall goods-based GDP, mainly driven by inventory build ups. With so much info it must be EASY to time the markets but there is so much misinformation and what feels like a puppet pumping liquid, to counter any perceived downturn resulting in an epic bear/short burn. But, similar to any investment, if your theory is based in fundamentals and re-evaluated on a monthly basis then what we’re all debating is time to correction not whether there will be a correction. I don’t believe anything on BD has been proven to be materially incorrect just lagging our expectation. This will be the biggest assets stripping and debt re-allocation in history, mark my words. This should be the golden era, I believe the last 10 years have been some of the worst. Tock. BD4L.
I laughed when I read “inventory build ups.” Try to find commercial storage space these days. Just-in-time production, yeah right, good one. Check the manufacturing date of stuff you buy, its likely older-than-you-think.
I miss your comments Blue.
I think you’re spot on that the market is lagging the expectations we have based on the data. Though if we were to take anything from Hollywood’s ‘The Big Short’ it’s that no matter how grim the data, shrewd people with the loudest voices will squeeze the blood out of every last stone before it all falls apart.
**Side note, I’m relating corporate tendencies, not national markets.
Hey all the Blue Bears. Again you guys waiting for the crash of condo market in Toronto? Ok can somebody give me the date already so I will mark it in my calendar when my investment of 2 bedroom condos in St. Lawrence market wich costed me 400 K will crash already? What I see the supply in Downtown Toronto cannot keep up with demand. And did you guys see latest report on rent in Downtown Toronto for 2 bedroom condo? It’s $3000 already. So please can some of you Blue Bears will give me the date? Tick Tock?
The folly of man, which happens to be one of our greatest strengths, is our optimism/idealism. We are taught to stay positive and only good things can happen. Initiative and innovation have always been our corner stone (in fact it is the reason China has struggled so much and is basically a market manipulated fun house…they lack both of these things. See how many EV car manufacturers there are…the number does not reflect a business community that knows much more than imitate and capital allocation, same applies to almost everything they do). What would be worse than a significant correction is the debt burden we’re faced with. I have no rebuttal my friend, prices may never come down (well they have already) but I do not see fundamentals to support the current prices levels and we are in the end run of a global debt cycle. Peace be with you. Tock. BD4L.
just buy and hold and you will be fine. if your anticipating a +20% discount on a toronto condo than good luck because it aint happening anytime soon…its more likely to just level off.. too many strong growth fundamentals like increased presence of tech companies in GTA, increasing milenial demand..with that comes higher paying jobs for skilled workers in the city who can afford these places. this is not the Toronto of the 80’s/90s dominated only by the finance and big bank sectors, Toronto is transforming into one of the tech hubs of the world.
Your observation skills need some fine tuning. Prices are on their way down at the moment. Try selling your investment condo right now and you will find you do not get nearly as much interest and you will not be negotiating for anything close to last year at this time.
I know from first hand experience. I’ve been planning the leave from my parents’ basement for years. Prices are definitely lower, and I’m not being pushed to make immediate offers as no one is competing. This is the Toronto waterfront I speak of, queens quay west, what most would consider very desirable.
If you don’t believe me, give Ross Kay a listen sometime. He will explain it more thoroughly.
Hey Blue I see your attitude a lot lately. I remember you been really brutal with bills on this website. May be because you purchased property yourself as you stated some months ago? 😀
Sorry one more correction : I remember you been really brutal with Bulls before.
When there is a tsunami, those who see it coming will do everything they can to raise awareness while they prepare. My goal has always been to raise awareness and eliminate subversion. Once the waves hit there is little to be done and we just have to make our peace with god. Tock. BD4L.
Correction : I see your attitude changed a lot lately
Keep the corrections coming Gear… eventually you might start making sense.
No more corrections Luigi Vampa. My point is this website always been very negative to Toronto real estate. And our Blue Bear here was one of the most vocal representatives of this website. Until he purchased a property himself – isn’t it ironic? Some investors here tried to explain for the last 4 years that Toronto fundamentals are very strong. Even now after so much growth in condo prices I believe condos will still rise between 4 to 9 percent year over year. The explanation is simple : supply and demand, jobs availability and immigration /migration. Good luck to all.
Bears will not give you an exact date. They will always say that the ‘crash’ will take place over a long period of time, usually a few years. In the meantime, when they see prices dropping marginally, they will say it’s already happening. Come a few years later, you will forget that they say a crash is happening…just like how people were predicting a crash since many years ago.
No doubt that there are many market indicators pointing to slower growth but I really doubt it will crash like many here are hoping in Toronto proper. The rest of the GTA outside Toronto have fallen to around 2016 levels and that should be the case as there were way too much speculation in their rise during the 2015-2017 years. Commute to workplaces (mainly to Toronto) add significant travel cost and are more vulnerable to external forces (foreign investors) since these are the people that care less about working / jobs.
I believe the demand for housing in Toronto proper, where most of the jobs are, will sustain the current price levels as there is strong local demand. The price gap between SFH and condos have shrunk so much that I feel that SFH will experience some growth while condo growth falls due to increasing inventory.
This is my take on the real estate market now/in the coming months and I may be wrong but at least I don’t go with the “it will happen soon/over the next few years” kind of opinion.
if its a crash or a soft landing…what does it matter..to hang around for the big discounts you will more likely be waiting a while…to keep holding sucks as you watch the values of your most precious investment dwindle away…its like watching a constant drip drip drip from a tap.. The bottom is a long way away. I’ve heard experts say the best case is a soft landing…To the ones who bought in late its to late to cash out right now all you can do is try and hang on for the ride..
All these downtown condo owners. Living in “the Borg”. You have won The Game of Life! Assimilate!!!