Greater Toronto real estate is showing signs of cooling, but buyers haven’t noticed. Toronto Regional Real Estate Board (TRREB) data shows home prices reached a new record high in May. It was accompanied by accelerating price growth, despite a decline in home sales. Home sales falling faster than new listings is typically followed by a drop in price growth. It may be hard to believe that with the moves home prices made last month.
Greater Toronto Home Prices Rise $20,600
Greater Toronto home resale prices are still making insanely large increases. The TRREB composite benchmark, aka a typical home, reached $1,045,800 in May, up 2.01% ($20,600) from the month before. Prices are now 17.83% ($158,250) higher than the same month last year. Both the month-over-month and annual price increase accelerated in growth. The annual rate is now the largest seen since June 2017, during the single-family home gold rush.
Greater Toronto Benchmark Price
The price of a “typical” composite home across Greater Toronto.Source: TRREB. Better Dwelling.
Price Growth In The City Made A Bigger Jump
The City of Toronto had been lagging over the past year, but made a huge leap last month. The City composite benchmark reached $1,105,900 in May, up 4.72% ($49,800) from the month before. Prices are now up 9.11% ($92,336) compared to the same month a year ago. Annual growth came in at almost half the rate seen across the Greater Region. However, the monthly rate was twice that, which is a large acceleration. A typical home increased by half the annual median household income over just one month… again.
Greater Toronto Benchmark Price Change
The annual percent change of TRREB’s benchmark price for all home types.Source: TRREB. Better Dwelling.
Toronto Home Sales Are Falling Faster Than Inventory
Price growth acceleration is likely to cool on its own, without outside intervention. Seasonally adjusted home sales fell to 9,786 in May, down 8.90% from the month before. This helped to push the unadjusted sales to new listings ratio (SNLR) to 64.30% for the month. Over the past few months, this indicator has been rapidly falling, dropping from over 120%. At a high level, the market is now almost twice as well supplied as it was during the tightest period over the past year.
Greater Toronto home price appreciation is coasting largely on expectations. As the market becomes better supplied, price growth is rising even faster. With that in mind, such a fast deterioration in the SNLR has always been followed by a drop in price growth. This usually starts to happen about 6 months after the peak, and last month was the fourth month. Even if price growth slows, there is still a lot of room for the market to cool down.
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