Toronto detached real estate is seeing demand decline, almost as quickly as it rose last year. Toronto Real Estate Board (TREB) numbers for February show prices are falling. The price movement is expected, as higher inventory levels meet declining sales.
Benchmark Prices Vary From A 9% Gain, To Declines Over 10%
The prices of a detached home is lower across Toronto. The benchmark price, a.k.a. a typical detached home, fell to $915,300 across TREB in February, a 2.06% decline from last year. Detached homes in the City of Toronto saw the benchmark fall to $1,090,000, a 1.51% decline from last year. Prices in the suburbs are most definitely falling faster than those in the city.
Source: TREB, Better Dwelling.
Speaking of prices in the city, the benchmark price across the City of Toronto is showing huge swings. TREB region C01, which is central downtown Toronto, is seeing the highest increase in prices. The benchmark detached price reached $1,075,200 in that area, a 9.49% increase from last year. On the other side of that read, is TREB region E05, the Steeles-L’Amoreaux region in the north-east, where prices fell the most. The benchmark detached reached $888,500 in that ‘hood, a 10.31% decline compared to last year. Swings are likely a sign of price discovery, as the market attempts to figure out where prices should be.
For those skeptical of the benchmark, there’s the median price – a more commonly used indicator across the world. The median sale price of a detached fell to $841,000 across TREB, a 13.74% decline from last year. In the City of Toronto, the median fell to $1,000,500, an even more steep 20.15% decline from last year. This tells us prices are falling, there’s less sales of higher end properties, or both.
Source: TREB, Better Dwelling.
The average sale price also saw huge declines across the board. All TREB regions saw an average sale price of $1,000,736, a 17.2% decline from the year before. Breaking that down, the City of Toronto had an average sale price of 1,282,240, an 18.6% decline from last year. In the suburbs, a.k.a. the 905, the average sale price fell to 911,065, a 17.8% decline from last year. Remember, average sale prices aren’t helpful for determining what you’ll pay. They’re helpful for determining the flow of dollars. Right now, we’re seeing that decline to new multi-month lows.
Source: TREB, Better Dwelling.
Detached Sales Are Down Over 41%
Detached sales are declining across Greater Toronto. TREB reported 2,169 detached sales in February, a 41.71% decline from last year. Breaking that down, the City of Toronto saw 524 of those sales, a decline of 33.6% from last year. The suburbs saw sales drop to 1,645 detached units, a 43.3% decline from last year. Sales are declining across Greater Toronto, but are falling faster in the ‘burbs.
Source: TREB, Better Dwelling.
Detached Inventory Soars Over 199%
The decline in sales is being met with a rise in inventory. TREB reported 5,556 new detached listings, a rise of 15.15% from last year. The City of Toronto saw 1,1134 new listings, a modest 2.16% increase from last year. Despite the mild increase, some serious inventory is building up.
The increase in new listings, combined with the decline sales, led to a rise in active listings, which are the total available inventory. TREB reported 7,852 active detached listings, a 199.24% increase from last year. The City of Toronto saw 1,453 active detached listings, a 121% increase from last year. You’ll probably hear your agent argue “but last year was a record low,” it was expected to rise. This number is still 48% higher than the median number of active detached listings, going back to 2015.
Next month will be an interesting month for sales. Most mortgages approved before B-20 stress tests became mandatory, will have expired. Most buyers at the Big Six, will be subject to smaller mortgages than just 3 months ago. This will have a greater impact on more expensive segments of housing, like detached units.
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I know when people think of housing, they lose all ability to do math, but 2% is about $20,000. That’s like putting a Honda Civic in the driveway of that home, or buying someone else one in order to have your home early last year.
Plus the $40,000 in interest you would have paid last year to this. If you spent less than $40k in interest on rent last year, it’s adding up to a nice payday. That’s before you add the difference in property taxes, maintenance, etc..
Poor decisions are made when people panic.
SNLR is now 39% for detached and falling. Look out below, you’re officially in a buyers market. Not sure when the last time Toronto was in a buyers market, but prices fall really fast in this territory.
We’re in a declining market and the difference should be noted. A buyers market is where there is a healthy amount of inventory (I can’t recall but I believe 30-60 days…probably wrong) where there is limited pressure on buyers to make decisions based on exuberance and basic disregard for their financial situation. Rationale decisions are being made and the cycle of buy small, save and upgrade can be followed over a 10-15+ year period. Many only consider the market healthy when it is a buyers market as prices stay somewhat stable and there are always inventory available for a range of buyers. Sure an area might blow up, there can still be multipl bid but no one is buying an 80s shit hole in Brampton for $1,000,000.
This is a declining market. As you noted, prices fall fast. Dumb money will pile in, as we’ve seen but all they will catch is the falling knife. We really need to see how April-June goes IMO. At least Moose Jaw, Sask will be saved as it is the driver of our economy…phew! ;0)
Detached homes are rare in Toronto.
We can’t build any more in the city, so they’ll always go up in price. This is just a minor temporary blip. Down 2% is nothing compared to what you would have made last year.
“they’ll always go up in price”
I broke down laughing at my computer. Like, do you even read this blog, or just skip to posting comments? The denial is strong in this one.
Over the long term, they can and will go up. A detached home is a luxury product. Most of them are already being knocked down to build condos.
If you own detached at Toronto it’s best investment you made specially if you bought it before 2013. The only thing that will cause crash if there are sudden increase in interest rate like 500 point increase or unemployment first to 10 percent or above. For now or in next few years things will remain stable. If you own home for you your family but not as investment keep it and relax.
Yes, if you bought before the 100-300% appreciation experienced then yes but in the same token, if you bought in the 80s then you’re sitting on a king’s ransom…we’re not living in the past and as prices decrease significantly in the next 6-12 months the boomers who want to retire in the best position or those who borrowed against their house will most likely freak out…this is a FOMO culture my friend. It can take 10+ years to recover..tell that to a 65+ year old who took out $300K for their seed to buy a condo. Also, the rest of your post is myopic, we don’t need interest rates in the 8% range to tank our economy; many household are already spending well over 30% on their housing costs some in the 50% range. We’ve hit our limit. Time for the dam to burst. Hope you can swim.
Yes I know we are in deep shit but let’s try to be little positive how about that?
As long as your positivity does not motivate financially-uneducated to commit RE-driven financial stupidity, by all means stay positive. Though given the current situation it is much better to stay realistic.
No. You know I chill on this block. You also know I hate subversive shit that someone who isn’t a hawk may perceive as positive news and use as some sort of a rationale to make a bad decision. I don’t expect everyone to agree with everything here or ‘drink my kool-aid'(hint: there are drugs in it) but to spout something that is fundamentally untrue is not going to fly. Unless you’re commenting on data from the article or what is being presented in some form you need to support your arguements because if you just drop hyperbole I’m going to kick you in your ‘hyperballes’ (this sounded a lot funnier in my head btw).
Lol fair enough. Maybe this will be good for our country in long run once we get of this mess and rebound will be well prepared for next one.
MMR the cycle will take so long that by the time the next one happens everyone will have forgotten, no one will listen to those who survived the last, and the narrative will again be PRICES GO UP FOREVER! History repeats!
You must have missed the most recent Census showing that detached homes are the most plentiful segment of housing in Toronto?
Mike that is why I think you should hurry and buy 5-10 before September
. Bid as high as you need just for the love of all things holy please HURRY!
Lol, Thats a Good one Mike. Don’t Jump!
Mike, I think you are dangerously confused or you are trying to confuse people here. Detached home is a luxury (for some people) only if you OWN it, not before. What many people in TO, VAN owns now is a debt larger than their entire lives times 2. Go ahead and skip 2 mortgage payments and taxes to see what’s going to be your position at that point!
Hickory, dickory, dock
cheap money ran up our hock
the clock struck spring
no one will win
Hickory, dickory, tick tock
Sorry about yesterday Grizz! I wrote you a poem
All good Blue. Its good to have the BD sheriff back in action to silence the trolls. Casualties happen sometimes.
Some lenders issued 120 day mortgage pre-approvals. They’re not common, but mortgage brokers were trying to keep the party going as long as possible. We’ll probably see a huge drop off in March, but a ridiculous drop off in April/May.
You can’t reduce the amount people can borrow, without experiencing a proportionate amount of price declines.
Hit that one on the head…a lot of the populous believes there was no credit extensions or they were extended/honoured for no more than 30-60 days but a number of lenders including major banks like CIBC have allowed 4 months(I haven’t heard more than 120). I imagine the narrative for many RE agents in March/April will be ‘look all the bad money is out and the market is still strong. Buy at a discount because they will pop back up!’ That, my friends, is a fugazi. If you want to catch the knife at a 10% correction, you’ll be underwater in 6-12 months assuming you’re over leveraged (Hint: we know most buyers are severely over-leveraged!). Tick tock
Don’t believe FRFIs are allowed to issue a pre-approval for longer than 120 days.
Can you imagine the stupidity of not collecting any interest, but guaranteeing a rate for longer than four months? I would get pre-approved twice a year, and take them up on the offer whenever rates increased.
Can’t remember where I read it I will look for it can’t remember what bank it was either but one extended the extended pre-approvals just last month to tack an additional 90 days to the original term so in short those mortgages were pre-approved in December 2017 and are now going to be valid through to the end of June!
Hmmm…I need to look into this and see how pervasive it is. I hope it only represents a small number of buyers. Thanks Brain.
Blue I am trying to find the damn link! I read it last week or the week before and though what a stupid fucking move must be desperate as shit! going to go search more!
Pretty sure you’re talking about BMO. Here’s the link: https://www.newswire.ca/news-releases/bmo-extends-mortgage-rate-guarantee-period-for-home-buyers-675965203.html
Not sure though that this applies to pre-approvals that happened in the past.
Yup that’s it David and you are right it doesn’t go back to December but that is a fucking real long period of pre-approval!
Driving around I am seeing a lot of homes for sales are that “exclusives”.
This means that they are not on MLS but are listed on the agent’s/broker’s site.
Also, a lot of agents have signs on the homes but are not on MLS, breaking a TREB rule that TREB would never enforce.
So many listing last year just did not sell and are effectively still for sale but just not counted as a listing.
In Toronto the real estate industry has gone another rung lower to try and create the illusion that listings are low.
Renovators/contractors are dumping their land banked tear down homes as they do not see a path to make money on a re-build.
Some are even trying to dump their work in progress, half finished homes.
This will get ugly very soon.
That’s interesting. I wonder how much phantom inventory there is out there – for sale but not listed on MLS.
I have also noticed this. Being in transition (M to F natch so I can play with boobs…lol) and living with the inlaws in a more rural area everyday I see more and more ‘For Sale’ signs for residential properties. What i find disturbing is that, when you live rural you find a route that works and never deviate (you make the wrong turn and it could take 10-15 minutes to correct course) so what I’m seeing is concentrated; the same 50-75 houses I pass by every day to work. Also a ton of commercial…farm land and low-density commercial sites. Pre-con subdivisions in places that can barely sustain life now scream ‘Free $30,000 in upgrades now’ or %/cash-back incentives. It speaks volumes when the big boy, who have dozens of analysts looking 5-15 years out, start to exit.
I see many of those too. Stuck mid renovation without any progress over the last half a year. Those are going to hit market hard.
I received my pre-approval in mid Jan and it expires mid May. 120 days at TD. I have no intention of using it or extending it but I was curious what I’d be pre-approved for. I was approved for $450,000.00 with 20% down at 3.44% fixed 5 year, 95k family gross.
Begs the question how people bought 800k houses in 2017…
Thie above comment is misplaced…
The worst part of this situation once they find a buyer, they list the house on MLS and at lower price and record the sales as ” sold over asking”
This decreases Days on market
Increase the number of sales compared to listings: the absorption rate
Increases the selling to asking price ratio.
I trust that somewhere out there, a UofT, Waterloo, Ryerson, etc. student is finding a solution to this data mess.
TREB, OREA, CREA only facilitate this scam. I actually think they come up with these tactics and disseminate it to their membership.
In Open Data I trust!
Well said. I don’t know how can anyone trust anything coming from RE industry. Also I don’t know why they are allowed to do this with total impunity.
Hey BD, if only someone would come up with an independent and trustworthy index/measure of the housing market… just thinking out loud…
Early this month an investment network released a report saying many major Ontario cities are now in the recovery phase in the real estate cycle and that in the next 5 years there will be a run up in prices until we get to the real boom phase that we haven’t seen yet but they say it’s hard to predict the real exact duration of each phase.
This means 5 years from now the prices will be higher according to their analysis which is the opposite of what you guys are seeing.
What’s your comments on that?
I would like to see that article. I would guess that they are getting a lot of their data/ analysis/ expertise from TREB CREA or OREA. If any of those cities they are referring to are in the golden horseshoe I would like to see how they define a boom. Last years 30% YOY gains are not a boom?
Even the RE industry is saying now to ignore last years prices and sales volume because that was not sustainable. How about a doubling of prices in 2-3 years…….. Not a boom? When did we go through the recession phase? That has to happen before the “recovery phase”
I think we are half way to the end of the hypersuply phase. We are starting to see record presales (OCT NOV 2017) regard new starts (February 2018). All of this will be hitting the market over the next 2-4 years and will just add to the available listings……. which for some segments is up over 200% YOY. I think in five years we will be at the start of the “Recovery phase”, that will be a good time to buy, and prices will be much lower than today
“Recovery phase” begins when a lot of the over supply is absorbed and economic conditions begin to encourage households to take financial risk again. Basically we still need to see acknowledgement that we built way to much, and we have to go through a recession as chuck of our workforce and economic productions moves to another industry……………… If prices are in fact higher 5 years from today, and the true boom has not happened……Than we would have to say that the last 17 years were recovery/ early expansion phase.
You are far too kind Grizz. Compassion is not my strong suit…thanks for killing him softly. As you noted, unless we missed a major cyclical phase then we can’t recover until we hit the trough. BD had a great article about the amount of inventory hitting in 2018 and leading into 2019…we could be swimming in new inventory + resale by the end of the summer. Maybe. Tick tock.
I don’t know how to link. Google Ontario real estate news newswire and you will see it there
Sorry Grizzly I forgot to mention
the report is titled top ten Ontario towns for investment
Is this Wiarton willy? A lot has changed since you’ve been in your hole my furry little buddy. Lemme unpack this treasure trove…an anonymous person online, potentially a ground hog, notes that an anonymous ‘investment network report’ that can’t be linked to indicated there will be further rapid price acceleration (as you noted: ‘run up in prices’) for another 5 years? Comment on what? This is clearly the silver bullet we’ve been waiting for…time to start buying whatever is available. But before I sell all of my Kitty Coins (got in pre-ICO bitches) and Tulip bulbs can I share with you an amazing penny stock that is going to EXPLODE and be the next Amazon? Send me your email, in fact I have a number of shares I would LOVE to sell direct via a steep discount because I am basically jesus for investors…I only accept Blue Coins which is pre-ICO and I can get you in at a great discount. To paraphrase 4chan…link or get the fuck out.
Blue I don’t know how to link please google Ontario real estate news on newswire and you will find it there.
Please go over it thoroughly and report back.
When I posted this guys it was because I know you look knowledgeable and have the ability to analyze and come with a conclusion and comments so that’s because I respect your knowledge
You don’t know how to paste a link? Makes sense for a ground hog. Hmmmm…I thought you were like racoons with opposable thumbs but guggle is suggesting otherwise…shit, ok so move your mouse (not your friend who is a mouse, the computer mouse) over the URL. With one paw, left click and drag over, might have to use your snout. Once highlighted, press ctrl+c…this will be tricky for a small mammal but I believe in you. Come here and using the same method, ctrl+p and BOOM you just cut and paste something from the Interwebgugglebook….seriously dude, don’t take the ‘I was just trying to get info, you are all smart’; I was suckered a couple of weeks ago thinking I was helping someone…if I smell bullshit I will gobble it up…INB4: yes, I eat shit, no need for a clever response. Nom Nom Nom.
May the corpse of Willy RIP.
Here is the link he’s referring to:
Published by REIN. That is, Real Estate Investment Network.
A totally unbiased source of news for Ontario real estate, to be sure. If REIN says it’s a great time to buy, then I’ll take two. Two minutes to get my laughter under control that is.
Ize gonna be RICH! Ize gonna buy me one of them there “home study systems” offered by REIN and get rich in real estate!
Landlording Secrets – That’s where I’ll start. When I’m done, you guys will be addressing me as ‘Mr. McLaughlin’ when you drop off the rent cheques.
Yasssss go buy in BRAMPTON AND MILTON RIGHT NOW!!! Please hurry!!!
Forget REIN.. Go with Tim and Eric instead..
Zone Theory works
Roses and Candy… Thanks REIN! Only commented once before on BD in response to the arrogance of a post seen.
I’ve got some time tonight and took a closer look at some of the REIN free reports.
All the usual fluff is being used to create optics of a sound investment journey with little discussion of risk while at the same time minimizing consequences. The language used on page 6 of the Barrie report is particularly alarming. They claim in the 4th paragraph that even in the hottest markets there will be “underperformers” and the best way to avoid this is to follow a “proven investment system”.
Nudge, nudge, wink, wink.. You can order online..
Additionally, suggestion is made that you can time the market and that even in a downturn you’ll be just fine as long as you’re a good study of the REIN method.
The truth is that with any RE downturn, NOTHING is sparred in relation to the masses and the rudimentary formula they reference as a basis for success is strikingly naive.
To all those considering the path of wealth accumulation by way of REIN guidance will be sheep lead to slaughter.
I’d place the greatest amount of attention on their disclaimer rather than the narrative.
Please stay away from these people..
spared.. oops.. autocorrect
Willy I told you yesterday when you posted this exact same thing HURRY go buy in those areas, buy as much as you can as fast as you can and then sit back and wait for your 50% plus investment return! GO BUY GO BUY GO BUY!!
Never been a better time to buy! But you have to HURRY!
Go go go! Just scored two pre-cons in grand valley for only $700 each, going to a million by the time I sell the assignment…in September! ;o)
In September every property in Canada will be 2 mil plus RUNNNNNNNNNNNNNN BUY MORE!!!
Nobody should trust the spew coming out of RE boards. Tim Hudak is CEO of OREA which tells you a lot. I’m not sure how a guy that imploded in politics because of his loose lips can be given a position like this. 6 months ago, he was blathering something about how dire a situation it was with the low inventory of SFHs. I notice the media isn’t beating down his door lately to get his opinion of where things are going.
He seems like a nice guy and all, and he was my MPP at one time. But, that’s about all I can say.
‘This tells us prices are falling, there’s less sales of higher end properties, or both.’
Or higher end prices are tanking far greater than lower end prices.
I can see Vancouver or Victoria being desirable.