Toronto

Toronto Condos Break Losing Streak, Prices Resume Climb

Toronto real estate is seeing price growth taper quickly, but condos just broke the downtrend. Is this the start of a reversal?

Toronto Condos Break Losing Streak, Prices Resume Climb

Toronto real estate has been on the decline, but condos are taking a breather from the downtrend. Toronto Real Estate Board (TREB) numbers show prices are higher, marking the end of a 3 month losing streak. Generally speaking, the market saw more inventory,  less sales, and higher prices.

Source: CREA.

Condo Prices Are Almost 23% Higher

The benchmark condo price broke a three month losing streak, making a jump higher. The price of a typical condo was $463,800 in October, 0.78% higher than the month before. This represents a 22.99% increase from the same time last year. The price growth trend continues to taper, but is still above 20%. It’s pretty hard to argue the market is “cooling,” but don’t expect huge gains in the near term.

Source: CREA.

The average sale price of condos are still retaining gains compared to last year. The average sale in October was $523,041, a 21.8% increase from the same month last year. Breaking that down, the City of Toronto had an average sale price of $555,004, which is 20.9% higher than last year. The 905 regions had an average sale price of $435,142, 21.0% higher than last year.

New Condo Listings Are Over 1% Higher Than Last Year

Condo inventory was higher this month, coming off of last year’s lows. New listings across TREB hit 3,359 in October, a 1.23% increase compared to last year. The City of Toronto saw 2,324 new listings, which is actually a decline of 2.8% compared to last year. Total inventory remained higher, with active condo listings reaching 3,873 across TREB, an 11.74% increase from last year. The City of Toronto had 2,549 of those listings, a 1.51% increase compared to last year. Despite what you’ve been hearing, inventory doesn’t matter unless compared to sales. Let’s look at how this stacks up.

Source: TREB.

Condo Sales Declined Almost 25%

Condo sales across Greater Toronto are dropping. TREB saw 2,025 sales, a 24.9% decline compared to the same month last year. Breaking that down, 1,485 of those sales occured in the City of Toronto, a decline of 21.63% from last year. Toronto’s suburbs saw 540 of those sales, a 33% decline from last year. Contrasting these numbers to listings, the sales to new listings ratio is now 60%, a 25% decline from last year. This means there’s less pressure for prices to rise, but the market is still in favor of sellers.

Toronto condos are still a sellers market, meaning buyers are still paying whatever they want. This segment hasn’t had a major pullback in recent time, but price growth is tapering very quickly. This is expected after the huge run, especially when combined with the tens of thousands of pre-construction units hitting the market. Pre-construction won’t provide much relief in the near term for those looking for immediate occupancy. However, it will deter many buyers from the immediate market.

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6 Comments

  • Reply
    Justin Thyme 6 days ago

    We are now in a ‘fad’ housing market. The Pet Rock phenomena. Pay unreasonable prices for worthless objects ‘just because’. Everyone KNEW the bottom would fall out for pet rocks, they KNEW they would never get their money back, they KNEW the value was not there. but the buyers didn’t care. It was faddish to actually PAY these prices, not because of the product, but because of the fame.

    Remember Beanie Babies, Cabbage Patch Kids, Royal Doulton, the Bradford Exchange? Sports trading cards? They all have something in common. The supply is really unlimited. More are constantly being made. There is no long-term shortage. Just wait for more to become available.

    But the market is now being driven by hucksters and developers, carnies, scalpers, people who know precisely how to separate the mark from their money.

    • Reply
      Bill Ferguson 6 days ago

      Well said!

      If you’re interested in the unfolding carnage in Metro Vancouver, feel free to join us at “Metro Vancouver Housing Collapse”!

    • Reply
      Mario 5 days ago

      Can you live in a pet rock? Do your trading cards give you shelter? Are you actually trying to make serious comparisons? If you are, give your head a shake.

  • Reply
    Rr 6 days ago

    What proportion of sales are coming from new construction vs resales?And has the ratio changed in the last year?

    • Reply
      TO Real Estate Guy 6 days ago

      These are TREB numbers, so they would only be resale. No one knows what pre-sales are going for, but they’re being heavily discounted through agents right now.

    • Reply
      Mario 5 days ago

      There were 1,749 high-rise presales in the GTA in September at an average price of ~$660,000 per unit, representing a 2.6% increase from August, 2017 and a YoY increase of 36%.

      There have been over 27,000 high-rise presales in the GTA from Jan. to Sept. 2017, a 29% increase YoY.

      High-rise unit supply in the GTA has been 26,000 YTD. Although this is nearly double the YTD supply in 2016, sales are still outstripping new supply.

      86% of all high-rise units in active GTA projects are sold, resulting in an inventory of just under 9,400 units. Given sales for over the last 12 months, there is just over a 3-month supply of new high-rise unit inventory.

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