Toronto

Toronto Detached Real Estate Sales Fall To 2008 Levels, Prices Down 13% From Peak

Toronto Detached Real Estate Sales Fall To 2008 Levels, Prices Down 13% From Peak

Toronto’s detached real estate market continued to get colder last month. Toronto Real Estate Board (TREB) numbers show prices stalled in December. The lack of price movement was due to a multi-year low for sales, and higher than typical inventory.

The Price Of A “Typical” Detached Is Almost Flat

Detached home prices didn’t move much across Greater Toronto. The typical (a.k.a. benchmark) detached home price in TREB reached $907,900 in December, up 0.16% from last year. The City of Toronto benchmark price reached $1,097,400, up 1.13% from last year. For context, they both printed numbers lower than inflation expectations.

Toronto Detached Benchmark Price

The price of a typical detached home across the Toronto Real Estate Board, in Canadian dollars.

Source: TREB, Better Dwelling.

Detached prices are still negative across the board, and tapering in the city. TREB’s 0.16% is a smaller annual loss than last month, but still in negative territory. The City of Toronto’s 1.13% is actually a smaller gain than last month. Detached prices across TREB are now down 13.53% from peak, and the City of Toronto is down 10.67%. Both markets are considered to be in a technical correction.

Toronto Detached Benchmark Percent Change

The 12 month percent change of a typical detached home across the Toronto Real Estate Board.

Source: TREB, Better Dwelling.

The median sale price of a detached home isn’t doing hot either. TREB’s median sale price reached $820,000 in December, up 0.92% from last year. The City of Toronto’s median sale price fell to $876,000, down 6.31% from last year. The median is less useful for determining the price you’ll pay for a home. Instead, it should be used as a tool for understanding dollar flow.

Toronto Detached Average Sale Price

The average sale price of a detached house in the Toronto Real Estate Board.

Source: TREB, Better Dwelling.

The Average Sale Price Is Down Over 4%

The average sale price of detached real estate is down across Toronto. TREB reported an average sale price of $945,580 in December, down 4.4% from last year. The City of Toronto average fell to $1,145,892, down 8.0% from last year. Much like the median, the average isn’t particularly useful for determining the price you’ll pay. Instead, it should be used as a tool to help understand dollar flow.

Toronto Detached Average Sale Price Change

The 12 month percent change of average sale price across across TREB.

Source: TREB, Better Dwelling.

Toronto Detached Real Estate Sales Fall Over 17%

Toronto detached real estate sales are falling, and fast. TREB reported 1,590 sales in December, down 17% from last year. The City of Toronto represented 340 of those sales, down 24.1% from last year. A couple of things worth mentioning here.

Toronto Detached Sales Vs. New Listings

The total number of detached sales, compared to the number of new detached listings per month.

Source: TREB, Better Dwelling.

Last year’s sales were irregular, so the decline doesn’t provide a lot of insights. Last year we saw a “rush” of buyers in December, trying to beat credit tightening that occurred on January 1, 2018. The drop was largely expected. That aside, it was still the worst year for detached sales since 2008. It was expected detached sales would come in lower this year, just not this low.

Second Highest December Inventory In At Least 8 Years

The number of new listings for detached real estate fell across Greater Toronto. TREB reported 2,090 new listings in December, down 31.38% from last year. The City of Toronto represented 377 of those new listings, down 43.73% from last year. Existing inventory build up helped soften the drop of new listings.

Active listings for detached homes, the number for sale, fell but were still higher than usual. TREB reported 6,920 active listings in December, down 7.83% from last year’s multi-year high. The City of Toronto represented 1,292 of those listings, down 11.92% from last year. Oh no, a shortage of inventory! Not exactly… this is the second highest number for detached inventory in at least 8 years. Prior to that, full active listings data was not available.

Toronto Active Detached Listings

The total number of detached listings available.

Source: TREB, Better Dwelling.

Detached prices are down from peak, and the “recovery” gains are getting smaller. Sales have fallen to Great Recession levels, with inventory higher than normal. Until these indicators make drastic changes, don’t expect a market shift soon.

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16 Comments

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  • Reply
    Tara Chen 2 weeks ago

    lolol. 13% below peak. The other day on the news, an agent said prices are still positive. Funny how you can still be positive, but lose $150k.

    • Reply
      Bluetheimpala 2 weeks ago

      If the prior year I go up 30% and the next year the increases 5% the YoY delta has increased but the R-squared is negative, the rate of change is negative but hasn’t crossed into negative. While correct, number jockeys don’t understand how silly they look touting this narrative. Hey that building is burning but the back half is still looking good…sweet lord. Tock. BD4L.

  • Reply
    Michael Clark 2 weeks ago

    A 10% drop is a pretty good price, and probably as low as prices can go before rising again in the spring. If you were waiting for the market to bottom, this is probably your best time buy.

    • Reply
      Mtl_Matt 2 weeks ago

      Thanks for the laugh.

    • Reply
      someguy 2 weeks ago

      Yup, 30% YoY in the good years, 5-8 in the bad, with the very rare 10% drop mixed in every couple of decades. I’d better save up for that 25M tear down I buy in 2050.

      • Reply
        Trevor 2 weeks ago

        Some people fail to recognize that if their home keeps going up, their buying power keeps going down. When your home is making more money than most people can actually working, there’s a huge disconnect.

        • Reply
          Jay 2 weeks ago

          Good point Trevor, businesses will raise prices to compensate for their rising rent.

          The worst part is even if there is a real estate market crash, will these businesses lower their prices if their rent is lower? I highly doubt it.

          • OrionTheHunt3R 2 weeks ago

            Eventually, If they want to stay in business, they will be forced to. Who will be buying stuff they can’t possibly afford.

            Great thing about the market is that it finds a way to correct itself, unless otherwise artificially tempered with. It takes time, but it does.

    • Reply
      Jay 2 weeks ago

      Nice try.

  • Reply
    Ethan Wu 2 weeks ago

    Flat, but the cost of ownership wouldn’t have been. You’re looking at $33k in interest payments for that “flat” year, plus other ownership costs.

    If you’re spending more than $3k/month in rent, it makes sense if you’re willing to downsize to a smaller home. Otherwise, you’re better off having rented, and investing the principal that you would have paid into something secure like a GIC.

    The biggest misconception comes from current market rent prices. The median owner in Toronto is only paying $1,496 on their current mortgage. The median renter is only paying $1,201. Only people that are moving right now are locking in substantially higher rental or mortgage costs. The vast majority of the city couldn’t handle the rise that people are struggling to absorb.

  • Reply
    Russ 2 weeks ago

    Expect another 6 to 10 % drop in 2019 for TREB prices. We are 10 years in a booming cycle from 2008 and a recession is overdue. The stock markets are rigged and with so called good economic reports and job numbers, expect interest rates to go up this year which will impact the affordability again. How about all the mortgages that are due for renewal this year and next year?

  • Reply
    SUMSKILLZ 2 weeks ago

    What I don’t like about sale price averages is they hide things. I see northern York region homes that were moving for 1.2 Mil at 2017 spring peak, now sitting unsold for months and months, with a list price of $900 000 and falling. That’s a 25% drop, if not more.

    • Reply
      Bluetheimpala 2 weeks ago

      Exactly. What you’re posting is very, very important for us as we haven’t been cut off from good unbiased data and most of it is free (expect this to change over the next 10-15 years…tin foil in full effect but think about the pillars of power; control(influence/money/ownership) and information).
      Having power without control of the information leads to dissent. Controlling the information but not having control yields little….I digress….
      Just look around at what is being listed…30+ DOM, multiple relists, multiple price reductions, empty houses, 90s garbage, cookie-cutter housing…and none of it is selling. Tock. BD4L.

      • Reply
        Reindeer games 2 weeks ago

        Yep, am seeing this all through the gta suburbs all the way down to Hamilton. Having lived through the US housing crash all I can do is shake my head. You can almost pinpoint the areas that will be ground zero for the housing correction/crash here. When I see tiny and/or outdated homes 50 minutes from downtown listed at 1.2 million I LOL. You would never see that in NYC not even at the height of the bubble. This is more like what we are seeing in Silicon Valley which is being fueled by $250k tech salaries and $100k annual bonuses (though that market is correcting). What I also find fascinating, now that we can see price history, is the substantial percentage of homes that were sold multiple times a year for a decade and at times at a loss. Now here is my foil hat – money laundering??? Why on earth would so many homes be listed for sale upwards of twenty times in 10 years and at a loss in some instances?

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