Toronto

Toronto Detached Real Estate Buyers Have Lost Over $114K Since Last Year

Toronto Detached Real Estate Buyers Have Lost Over $114K Since Last Year

Last year, many Toronto real estate owners were watching their houses make more than them. This year? Not so much. Toronto Real Estate Board (TREB) numbers show detached home prices are down thousands of dollars in April. The detached price declines also appear to be accelerating, as sales continue to drop and inventory rises.

The Price of A “Typical” Detached Home Is Down Over $114,000

The benchmark price of a detached home made a seasonal climb, but is still down bigly from last year. TREB reported the benchmark detached is now $927,800, down 10.34% compared to last year. The City of Toronto benchmark detached reached $1,109,700, down 9.55% from the year before. Decades of price climbs, and a few months of declines won’t shake too many existing homeowners. Those that bought at peak last year, expecting a quick flip, are learning an expensive lesson.

Source: TREB, Better Dwelling.

The declines add up to some serious damage if you were planning on selling soon. According to TREB’s calculations, a typical detached owner would have lost $114,300 from last year. In the City of Toronto, a typical detached buyer would be down $116,600. Of course, the same paper gain rules apply to losses – you don’t actually realize them unless you sell. Although it’s worth noting that the benchmark declines are currently accelerating.

Source: TREB, Better Dwelling.

The median price, a more common measure used by international buyers, also shows a drop. The median sale price across TREB was $870,000 in April, a 12.99% decline from the year before. The City of Toronto saw a median sale price of $1,080,000, a 15.95% decline compared to the year before. Remember, median prices are not an indicator of what you’ll pay, but a better indicator of dollar flow.

Source: TREB, Better Dwelling.

Average Sale Price of A Detached Home Is Down Over 14%

The average sale price of a detached home is still negative, but a little better than the month before. The average detached sold for $1,030,103 across TREB, a 14.4% decline compared to last year. The average sale price in the City of Toronto is $1,354,719, a 14.3% decline compared to last year. March to April normally see a seasonal improvement, last year being an exception.

Source: TREB, Better Dwelling.

Toronto Detached Real Estate Sales Are Down Over 38%

Detached sales are down across Greater Toronto, from downtown to suburbs. TREB reported 3,451 detached sales across all regions, down 38.4% from the year before. Breaking that down, the City of Toronto saw 819 of those sales, a 34.3% decline compared to the year before. The burbs saw the other 2,632 sales, a 39.6% decline from the year before. Sales can decline for many reasons, including a lack of inventory, but this isn’t the case right now.

Source: TREB, Better Dwelling.

Toronto Detached Real Estate Inventory Rises Over 46%

New listings of detached real estate are declining across the Greater Toronto Area. TREB reported 8,578 new listings in April, a 27.69% decline from last year. The City of Toronto saw 1,811 of those new listings, a 29.39% decline compared to last year. The sales-to-new listings ratio (SNLR), a common way of determining how hot a market, is now at 40% for detached units. That would make it the worst SNLR for an April, in at least five years. CREA classifies a market this low on the border of a “balanced” and “buyers” market.

Despite the drop in new listings, inventory levels continued to rise. Active listings, those that remained for sale at month end, climbed closer to historic levels. TREB reported 10,956 active detached listings, a 46.9% increase compared to last year. The City of Toronto represented 1,909 of those active listings, an 18.94% increase compared to last year. Any rise in active listings while sales drops is generally not great for pushing prices higher. That said, detached inventory is growing faster in the suburbs than the city.

Source: TREB, Better Dwelling.

There’s two thoughts on declines in the segments, both hinging on credit. CMHC analysts believe that mortgage stress tests pushed buyers towards lower priced units. This has sent buyers towards cheaper condos (and sending their overvaluation model soaring). There’s also the belief that credit exhaustion has taken place. In the event of the latter, the market won’t be rebooted without a period of technical correction. Despite the perception that Toronto real estate is a terrible market, only detached units are in a correction.

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60 Comments

  • Reply
    Bluetheimpala 2 weeks ago

    Money flows to SFH. The major run up was in this segment with pressure on other segments as a result. Watch towns and semis come down disproportionately and then the condo bleed out in Q1 of 2019…maybe sooner to be honest, everything is happening quite quickly and we haven’t had any real fallout…if prices are deceleratng in this environment what will happen once we hit the foreclosure phase and enter trough? Maybe nothing. What do I know. BD4L.

    • Reply
      Ian 2 weeks ago

      Classic dumb money trail.

      Condos are cheap, relative to detached houses. Those buyers are usually the least informed, and think they can still get in on a trend. Detached buyers, that have more money and often better informed, lead the market.

      All agents are saying it’s an excellent time to buy. They all stopped buying the year before last.

      • Reply
        Joe 2 weeks ago

        Exactly, condos are the cheaper alternative to detached, and often one of the few alternatives that pre-approved and regular buyers can get into. We will know how bad that segment is by end of summer. Even then, it will just be the beginning.

  • Reply
    Sammy 2 weeks ago

    Month over month prices are up. I believe this is a recovery of the detached market. It can’t drop forever.

    • Reply
      Grizzly Gus 2 weeks ago

      Over the last decade; Please show me one period where prices didn’t go up MOM between January and May, followed by MOM declines through till august. There is one year where May was down MOM from April……..2017

      • Reply
        Soy Warrior 2 weeks ago

        This, didn’t see it already. Caching maybe? lol. Sorry to echo.

    • Reply
      Soy Warrior 2 weeks ago

      Everyone, repeat after me. Seasonal bumps are useless, that’s why people compare year over year. TREB doesn’t even use the month-over-month on their tables, because it makes no sense. Going into every spring prices rise, going into winter, they fall. This has to do with the way luxury markets sell, nothing to do with analysis.

    • Reply
      Joe 2 weeks ago

      2006 – Home prices in US peaked in first Quarter of year
      2007 – Home prices fluctuated in US, with visible signs of strain showing up in some places, including mortgage backed securities, mortgage origination, and home builders
      2008 – By second quarter of year, US was declared to be in a full blown housing crisis.

      18 Months from peak to crisis. The patterns are eerily similar now in Toronto

  • Reply
    Grizzly Gus 2 weeks ago

    Record sales of pre con condos in 2016-2017 at new all time highs. Record supply hitting the market over the next 3-4 years (provided a bunch more projects do not get cancelled). All of these contracts signed pre B20. Some before rates started ticking up

    Normally something is worth what someone is willing to pay for it. In RE something is worth what someone is willing and able to borrow.

    Bet the credit cycle.

    • Reply
      Trader Jim 2 weeks ago

      Most people are too uninformed to understand this point, but it’s 100% the most important issue when determining home prices. Upgrade chain breaks, the whole thing falls apart. Manic buyers push the trend higher, not understanding that they’re the ones paying the premium to push prices higher. Once you run of this segment of buyer, prices rapidly collapse. Example, bitcoin, etc.

      The only reason home prices take longer to fall, is the speed and cost of a sale. If it was relatively fee free, it would collapse overnight.

    • Reply
      @xelan_gta 2 weeks ago

      Exactly, that’s a perfect storm. That’s why I don’t expect party to last for more than 2 years.
      If you haven’t seen the numbers for those record GTA pre-construction condos here are those:
      2016 – 29,132
      2017 – 36,429 (60% of those are in Toronto)
      This is 25% growth in 1 year.

    • Reply
      MM 2 weeks ago

      “Bet the credit cycle” Love it!

  • Reply
    Tommy 2 weeks ago

    The same forces that are currently forcing a correction in the detached segment will do so in the condo segment. If condo prices continue to rise, soon it’ll only be speculators bidding against each other for units as actual homeowners drop out of the condo market. “Investors” already make up half of new condo purchases.

    Unlike the detached market, if a sell-off occurs in condos, there will be massive supply available which will cause a rapid and much deeper decline in condos prices. The breaking point for detached was $1.5 million. I don’t know what it is for condos but each month we get closer to it. It’s likely somewhere between $600k – $700k.

  • Reply
    Serg 2 weeks ago

    If you try to compare to 2010 prices you would see that detach grew way more percentage wise than condos (considerably more). There was no major condo growth until beginning of 2017. The detach market was way more overheated than condos. This could explain why detach segment is so much more vulnerable and dropping while condos holding up.

    Also try to do rent analysis. If someone bought a Richmond Hill house in April 2017 to flip and meanwhile renting, they would have negative cash flow of 2-3k (loosing few thousand a month if not more). If someone bought condo in in April 2017, their cash flow would be still negative but measured in just hundreds. Which is sustainable especially if condo was bought by parents for their kids when they grow up and those parents already paid off their own primary mortgage.
    So guess which investors/flippers will panic first: in Richmond hill detach or downtown condo?

    • Reply
      Mmr 2 weeks ago

      flippers and short term investors who take money from subprime will lose …other then that no one will lose money in condo or detached in down town nicer areas. It’s may 2018 we will have same discussion how market crashing 2019 and then 2020 like we have been doing it for so many years I gave up 😎

      • Reply
        Tommy 2 weeks ago

        The Toronto market only recovered from the 1990 crash, in 2012 when adjusted for inflation. In other words there have only been less than 6 years of actual growth in true home values, and here we are with an 11% correction underway.

        Places like Richmond Hill are already declining by much greater than 11% in the detached segment. The Toronto condo market will correct once the average goes from $500k to $600k+. Speculators will start dumping, as they did in 1989, when there are no more gains in appreciation and it’s too expensive to carry it since rents can’t cover the mortgage, let alone maintenance, property taxes, and condo fees.

        • Reply
          Mmr 2 weeks ago

          And when that will happen? I heard in 2011 condo market is already over valued…you guys will say same thing every year…when that almighty crash will show up…I have been waiting for that crash to buy new property but it never come…

          • Ai 2 weeks ago

            It took so long because of lack of gov oversight and banks like CIBC pushing no-income verification loans for Chinese investors. In natural market conditions, we would be already 2 years into corrected market. Well , I guess now it will be great time to grab a popcorn and watch speculators bleed. It happened in US in 2008. It will happen here. It’s pure math.

          • Tommy 2 weeks ago

            Mmr, I’m a real estate investor and as much as I want prices to keep soaring, I know that RE is cyclical. Every year that housing bears voiced their opinions I dismissed it until 2017 because prices don’t shoot up 30% year over year unless something drastic has changed. Nothing drastic occurred other than speculators getting in on the market just as they did in the late 80s.

            Before now, condo prices would allow an investor to service debt with rental income. That is not the case moving forward and that fact inches us closer to a correction every day. I suspect the correction will happen in the next year or two. It will certainly happen on or before all of that record development is completed in 2022.

      • Reply
        Grizzly Gus 2 weeks ago

        According to Condos.ca. Condo prices in toronto on PSF basis have more than doubled in since end of 2009.

        End of 2009 – $314 per sf
        Today – $742 SF

        Id say growth has taken off since end of 2015. Right after oil collapse and further rate decreases………hmmmmmmm

        End of 2015 – $445 SF
        end of 2016 – $ $481sf
        end of 2017 – $573 sf
        Today – $742 sf

        Growth of 66% in 2.5 years………..

        Also, we know that Condos that were taken possession of in 2017 were 48% investor owned. 44% of which were losing money month over month. 32% were losing more than a thousand a month. Occupied in 2017 implies the presales were done between 2013-2015 no? Take some time to build. Rents have to go up another 17% by 2021 for them to break even (monthly basis) assuming 20% down and no interest rate hikes. Have to go up by 28% if rates go up by a percentage. Existing rental stock can only go up according to rent control limits….

        In 2016-2017 we had record pre sales, and will have record supply hitting the market over the next 3-4 years. Can we assume that a larger percent of investors bought during this period than the tamer 2013-2015 period? I would think so………. and remember, these are investment properties. They presumable own at least one other property and are there for at least twice as exposed to raising rates and or falling prices………. But when they contracted for those units there was no B20 and interest rates hadn’t started to go up yet…………….

        And sure a parent that bought a condo for their kid (presumably because they were worried about price appreciaton 10 years from now) will have no problem losing money month over month as the asset depreciates, and as the monthly loss increases with higher rates……. That makes a ton of sense right? (sarcasm)….. Wouldn;t that same parent just rather invest the money in a dividend yielding stock that gains money month over month?

        Richmond Hill has had one of the largest corrections so far, but never had more than 22% of investors making up their sales………….. So which investor will lose more as a percent of their investment? Condo/ or Richmond hill detached?

        • Reply
          @xelan_gta 2 weeks ago

          Grizz, I would advice you to create a Twitter account. I did it to have access to more data and it well worth is. This blog is awesome but its coverage is limited.

          For example, one guy reported yesterday that firstlinecapitalmanagement.com is down.
          This web site belongs to another syndicated mortgage company and as of now it’s still down. Could be nothing, could be something but in any case you’ll know about it way faster than it appears in the news.

          Same advice is for everyone who may need access to faster and broader news.

        • Reply
          Tommy 2 weeks ago

          That’s exactly right. Condo prices took off in 2015 and haven’t looked back since. Anywhere between 20 – 25% of condo owners are bleeding money on their units that closed in 2017. This means that a significantly higher percentage will be losing money on units purchased in 2016 – present as prices have gone through the roof. As much as rents have increased, not even they can keep pace with condo prices. Anyone that bought a unit in 2016-present and doesn’t have deep pockets will have to dump their unit after completion. If they’re smart, they’ll try to do an Assignment before then.

  • Reply
    Mmr 2 weeks ago

    After increasing almost 300 percent detached finally fall 11 percent…some core downtown area it didn’t even fall at all…but yes real estate is a bad investment🤔….

    • Reply
      Ian 2 weeks ago

      I’m sure rising for 22 years, and one year of declines is a perfectly balanced market. It can only go up from here! \sarcasm

      No one’s debating that Toronto real estate is a perfect investment if you bought at the bottom, and sell at the top. Right now idiots like you are saying buying after 22 years of gains, means it can only go up! Even though prices didn’t recover from the last crash until 2008.

      • Reply
        Mmr 2 weeks ago

        Lol oh really…You will say the same thing in 2019 and then 2020 and then 2021 it will go on…been doing this argument for last 10 year😆😆…this is not the only blog where morons like you keep warning ppl…

        • Reply
          @xelan_gta 2 weeks ago

          Mmr, while it’s possible that RE market will continue to grow in 2019, 2020 and 2021 you must admit the reality.
          And reality is that if someone would tell you 2 years ago (and you are following this blog for a while) that detached house prices will drop in Toronto by 10% – you would make fun of him/her.
          Detached segment crashed last year in front of your eyes and this process is not over yet but you are saying “nah, this is just detached segment, Toronto core will be fine”

          This is a dangerous logic because in 2019 you may say “nah, Toronto core only down 5% it will rebound quickly”

          In 2020 you may say “now when it’s down 20% it’s definitely plenty of buyers will rush into the market and it will rebound quickly”

          I’m not saying that my timeline is correct but the fact is that detached segment in both GTA and GV took a hard hit last year, and this process if far from over yet. It may drag down condo market and the whole economy with it.

          So don’t tell me you heard same story year over year. Detached market was never down 10% for a very very long time.

          • Mmr 2 weeks ago

            Yes that might happen….I am not god I can’t predict future…so what if it don’t drop any more like next year market remain flat…what is that mean…When you can say for sure we are out of the woods for sure and going forward it will be health growth like 3 percent a year or something more normal…

          • @xelan_gta 2 weeks ago

            Nobody can predict future with 100%.
            All we can do is to analyze all current forces and try to evaluate potential impact.
            Just to name a few now you have:
            – Detached segment which is in still down YoY and it’s too early to say where it’s heading
            – Huge shift of buyers form detached segment to condo (which can only be temporary)
            – Rising interest rates environment (which is a huge force pushing prices down)
            – Potentially late stage of economic cycle which usually followed by recession
            – Increasing number of mortgage fraud reports (HCG, syndicate mortgages fraud, Vancouver schemes etc.)
            – Negative cash flow for RE investors in Toronto and Vancouver.
            – Aggressive government regulation aimed to slow down housing market

            All those factors are very new and never existed between 2009-2016 so this is a genuine different time now and you should treat it as such.

            Sorry for not giving you the answer you were looking for. I can give you a ballpark estimate of 2 years within which you should see a noticeable decline in condo prices but this estimate means nothing because all forces are changing every day and you never know what government will do tomorrow.

          • Mmr 2 weeks ago

            What about detached not condo market? If detached don’t fall any more by next year then…can we stop argue that crash will not happen in detached market? I am not talking about gta but in the city it self….

          • @xelan_gta 2 weeks ago

            Not until full interest rate tightening is finished (which will also will take up to 2 years).
            So if in 2 years we’ll see 5 years fixed mortgage around 5% and there will be no other major risks, population will be continue managing its debt and if inventory both in GTA and GV will stay below 2 months, only then I will start considering buying RE in Toronto.

    • Reply
      Grizzly Gus 2 weeks ago

      Rates go down – People are able and willing to borrow more to buy = Good for price appreciation

      Rates go up – People are able and willing to borrow less to buy = bad for price appreciation.

      Rates have been held down and continued to drop between 2009 and July 2017. B-20 adds a two percent rate hike to the person you are hoping will cash you out.

  • Reply
    Ai 2 weeks ago

    Canadians seem to be slow to learn. This situation happened already once and many of you or your parents were out of a job for months. Same greed, same approach.. even same excuses. The market is cyclical and heavily attached to wages which are stagnant for a decade. Of course, the market will flourish with 2% rates but you are not US with 30 years mortgages. 5yr term will wipe many families that were already buying via shadow lending, syndicate mortgages or were stretching their budgets to the max to feed FOMO.

    Don’t take my word for it. Watch this video from 1989:
    https://globalnews.ca/news/2444980/this-1989-documentary-on-asian-investment-in-vancouver-shows-how-little-has-changed/

    • Reply
      @xelan_gta 2 weeks ago

      Thanks for the link.

      “Those who don’t know history are doomed to repeat it.” – Edmund Burke

  • Reply
    CJ Ray 2 weeks ago

    The condo market is pretty much pooched now. There’s enough negative media garble to finally turn off the remaining speculators…the ones with half-brains. And that will only leave a small number of youngsters with parents (downpayment source) that don’t watch the news. Any remaining gains (if any) won’t be enough to cover fees. Mark my words. It may take the summer, but that will be it. Then, the fun will begin.

    Unfortunately, I’m always right. 🙂

      • Reply
        Mmr 2 weeks ago

        How come this is even legal…😑fucking annoying

      • Reply
        Grizzly Gus 2 weeks ago

        The mentality of the condo flipper. “I am a fool for paying these prices but no worries. I will find a greater fool to pay me more” Always ends well.

        • Reply
          gear74 2 weeks ago

          You bears are so funny! I already explained here to some – almost every condo project in Downtown Toronto comes with assignment option. Even if investor will change his mind and would like to sell before possession he can do that. I purchased 2 pre construction projects in 2015 in good Downtown Toronto location and its already up 250000 each. Tell me how can I loose with this prices? The demand for Downtown Toronto condos is crazy! Every sale is bidding war! Forget about buying, 10 people applying for your property just to rent it out. Now there will be more condos hitting the market soon but it will never keep up with demand. Not in Downtown Toronto area. So good luck bidding against Downtown Toronto condos.

          • stan 2 weeks ago

            Good for you . You know what you are doing in RE. commenters here are just fools hoping for crash so they can get out of their basement apartments. I agree, the rental demand is insane out there.

          • Mmr 2 weeks ago

            Don’t you have to pay for capital gain? Just wondering….how does this assignment work🤔…

          • Mmr 2 weeks ago

            Hey gear74 Congrats!! I wish I did something like this had the money but miss out so many opportunities it’s sucks….any way happy for you😁

          • Grizzly Gus 2 weeks ago

            Gains only count if you get those chips off the table

            https://twitter.com/ExtraGuac4Me/status/993800713653305346

          • Tommy 2 weeks ago

            You’re among the 56% of investors that bought in 2015 that can cover costs. The other 44% can’t. You bought in 2015 but now prices are much higher. Do you think someone that bought a condo in 2017 can cover costs when the unit is completed? The math no longer works for them. That 44% will grow much higher.

            I also bought a resale condo in 2015 and am counting my blessings. I’m prepared and completely ok with a rollback in prices since I’ve gained so much already. The writing on the wall is clear.

  • Reply
    stan 2 weeks ago

    blah blah blah. everyone here trying to convince a crash. it has been going up crazy for 10 years straight. it will plateau and then go up again. Toronto will have 2 million more people in the next 20 years with green belt limitation. no more sprawl. government will protect the system from crash. suckers that did not get in are now forever renters. almost every detached house in toronto from Oakville to Brampton to Markham to Oshawa has basement apartments. the demand for housing is incredible. I am a landlord and the amount of people that show up for apartments is overwhelming. I’m with MMr – invest in strategic areas and you are solid.

    • Reply
      Joe 2 weeks ago

      Because…. “this time it is different”

      it would be a first in nearly 500 years of major bubbles in world history

      • Reply
        stan 2 weeks ago

        you keep up the drivel while we make money in RE.

        • Reply
          gear74 2 weeks ago

          If you sell assignment you need to pay 50% capital gain from the profit. I will try to close and rent out the condo for at least 1 year. This way you keep much more money in your pocket. You get HST money back plus capital gain calculation is much less.

          • Mmr 2 weeks ago

            What if builder cancel the project then how you do assessment?? This is nuts and so risky…😐

      • Reply
        Mmr 2 weeks ago

        http://www.torontocondobubble.com/?m=1

        Hey joe seems like this word this time was different was use in 2009 as well it’s been 10 fucking years…that’s the sentence from a holly wood movie lol you guys keep using…😆😆😆just go that blog and read comments from 2009 it’s entertaining lol they have been also predicting dooms day for 10 years just like you are.

          • Mmr 2 weeks ago

            But that’s the point you guys keep referring 1989 crash and in other blogs ppls use that to tell me it will crash back in 2009…1989 seems like the holy bible to win an argument…for last 10 years…don’t trust me read the comments ppl made and how they reference 1898 crash to justify in 2009 dooms day…maybe it will crash I don’t know but this is just annoying…

          • @xelan_gta 2 weeks ago

            Mmr, seriously? 0 advice for you going forward.

        • Reply
          Grizzly Gus 2 weeks ago

          Good little post today on Twitter

          https://twitter.com/ExtraGuac4Me/status/993800713653305346

          Great story a few years after the last bubble blew.

          40% of condo units were sold to investors. 50% crash.

        • Reply
          gear74 2 weeks ago

          Mmr. Yes the builder can cancel the project. And actually it happen couple times like with Cosmos condos in Vaughan. But this examples are very rare. Stick to reputable builder and you will get rewarded. Anyway all this people from Cosmos condos didn’t loose nothing – all their downpayment will be returned. But they didn’t gain anything also. With the price appreciation for that condo they could rip at least 200000 dollars profit. Now they need to look for new project – too bad. But like I said canceling the project is very rare with good reputable builder.

    • Reply
      Tommy 2 weeks ago

      Prices are coming down not just in Toronto but all other major markets across the world save for Hong Kong. Why? Too expensive. Rents in Manhattan are coming down. Toronto is no NYC and even NYC had a correction in 2008 (not just a plateau) just like every market eventually does.

  • Reply
    stan 2 weeks ago

    let’s face it – almost every country out there is a crap hole. either horrible conditions or great conditions for the native population with bigly racism. Canada has its faults but is a great country and they want in – either through RE, legal immigration or walking to the border. Just like Castro did to the USA in the early 80’s with the Cubans the USA is crapping all over us with sending their illegal immigrants to our border. Sponsored by a paid actor/commenter from the Doug Ford campaign.

  • Reply
    MC 2 weeks ago

    How is median price an indicator of dollar flow? You have no idea how much dollars exchanged hands with median price. With average price, by definition, average price * number of sales = dollar flow.

  • Reply
    Rocky 2 weeks ago

    Wait until Doug Ford revokes foreign buyer tax and prices goes back to April 2017.All your other analyses is junk 🙂

    Can’t wait for Kathleen Wynee to be thrown out in a month.

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