Greater Toronto real estate prices were cooling but have reversed course post-election. Toronto Regional Real Estate Board (TRREB) data shows prices surged higher in October. Not a little either, but a typical home saw a monthly increase of nearly a year’s pay at the median wage. Stimulus driven pandemic demand met typical October inventory to cause a massive squeeze.
Toronto Real Estate Prices Climbed $46,000 In A Month
Greater Toronto real estate prices surged last month, further breaking the deceleration trend. The TRREB composite benchmark price jumped to $1,128,600 in October, up 4.3% ($46,200) from a month before. Compared to the same month last year, a typical home is now 24.2% ($220,000) more expensive. If you missed that, a typical home increased by the cost of a Honda Civic in just one month.
In the City of Toronto, home prices moved quickly but not quite as fast as they did in the 905 region. The City’s benchmark price hit $1,151,000 in October, rising 3.8% ($42,500) from a month before. Compared to the same month last year, a typical home is now 15.6% ($155,600) higher. Extremely fast growth but this tells us suburban home prices are growing even faster.
Greater Toronto Benchmark Price
The price of a “typical” composite home across Greater Toronto.
Source: TRREB; Better Dwelling.
Toronto Real Estate Inventory Is Very Tight These Days
The sudden surge wasn’t much of a mystery this month with very tight inventory. The sales to new listings ratio (SNLR) across TRREB reached 72.7% in October, up from 70.6% from a month before. In the City of Toronto it climbed to 67.4%, up from 64.3% the month before. Above 60% is considered a seller’s market, where prices are expected to rise.
Greater Toronto Benchmark Price Change
The annual percent change of TRREB’s benchmark price for all home types.
Source: TRREB; Better Dwelling.
Greater Toronto real estate completely reversed course post-election. A high stimulus environment with subsidies designed to boost prices, drove demand. At the same time, October’s inventory was typical for the month. Stimulus also pushes home prices higher, making sellers less motivated to list now.
A high price growth environment is expected to slow in coming months. Quantitative ease (QE) is coming to an end and mortgage rates are rising. Inventory is also forecast to rise, as record construction starts hitting the market.
Still, this is hard to explain to a buyer panicked and worried they’ll be priced out of the market today… Especially when a government is re-elected with a plan expected to push prices higher.
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