Toronto

Toronto Real Estate Prices Return To Double Digit Growth, As Inventory Drops

Greater Toronto real estate is off to the strongest year since the 2017 boom. Toronto Regional Real Estate Board (TRREB) data shows much higher prices in February. The increase in prices were largely the result of many more sales, and fast falling inventory.

Greater Toronto Real Estate Prices Rise Over 10%

The benchmark price of a home in Greater Toronto reached a new all-time high. The industry’s “typical” price indicator reached $846,100 across TRREB in February, up 10.19% from last year. The City of Toronto benchmark reached $932,500, up 9.40% from the same month last year. Breaking it down, condos pushed another all-time high, but single-family homes are still down from the peak for now.

Greater Toronto Benchmark Price

The price of a “typical” composite home across Greater Toronto.

Source: TRREB. Better Dwelling.

The benchmark’s rate of growth is back to higher than usual growth. Price growth has had month-over-month acceleration since May 2019. At 10.19% higher than last year, this is the strongest move for the composite since October 2017. Even looking at the historic trend, this level is virtually unheard of prior to 2015.

Greater Toronto Benchmark Price Change

The annual percent change of TRREB’s benchmark price for all home types.

Source: TRREB. Better Dwelling.

The median sale price is making even bigger gains. TRREB reported a median sale price of $780,000 in February, up 15.57% from a year before. The City of Toronto sales work out to $788,000, up 16.40% from last year. Despite the large gain, the median home sold is still more than 10% lower than the benchmark.

The average sold price is making big gains as well, as the luxury market returns. TRREB’s average sale price of all homes hit $910,290 in February, up 16.64% from last year. The City of Toronto average hit $989,218, up 17.73% from last year. Averages aren’t adjusted for size or quality, so they aren’t particularly helpful for determining prices. They are better suited for getting an idea of how dollar flow is moving into the market though.

Greater Toronto Average Sale Price Change

The annual percent change of the average sale price of all homes.

Source: TRREB, Better Dwelling.

Biggest February For Toronto Real Estate Since 2017

Last month was a big one for sales, but not quite at the boom time volumes we saw a few years ago. TRREB reported 7,256 sales in February, up 44.39% from a year before. City of Toronto properties represented 2,477 of those properties, up 31.82% from last year. The volume of sales made a big increase from last year, but that’s compared to an usually weak month. This month is the highest since 2017 and bigger than typical, but not quite as big as the growth might make it seem.

Greater Toronto December Home Sales

The total home sales across TREB by year, for the month of January.

Source: TRREB, Better Dwelling.

Greater Toronto Inventory Is Falling Fast

Toronto is seeing more new inventory, but not nearly enough for the sales volume. TRREB reported 10,613 new listings in February, up 7.99% from a year before. The City of Toronto represents 3,519 of those units, up 6.60% from last year. That’s a substantial increase from last year’s volume. However, it’s not even close to the increase seen in sales. This is leading to a much tighter market for sale volumes.

Greater Toronto Sales To New Listings

The number newly listed units per month, in contrast to sales.

Source: TRREB, Better Dwelling.

A lot fewer new listings in contrast to sales means the inventory is getting even tighter. TRREB reported 8,816 active listings in February, down a whopping 33.63% from last year. City of Toronto listings represents 2,720 of the listings, down 30.82% from last year. The 905 is seeing inventory drop faster than the city, but both are seeing big declines. This is the lowest level of inventory for the month since 2017.

Greater Toronto January Active Listings

The total of active home listings across TREB by year, for the month of January.

Source: TRREB, Better Dwelling.

Generally, the Toronto real estate market saw higher prices, more sales, and less inventory. The sales bump sparked by double cohorting buyers delayed by B-20 Guidelines, is materializing into big price growth. Since no one wants to sell while their house prices are rising quickly, this could be a tight market this spring.

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12 Comments

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  • Reply
    GTA Landlord 3 months ago

    Prices will rise, and financing will get cheaper.

    Just remember the BOC is almost out of bullets, and the economy had produced flat growth for almost all of last year. Long term, you’ll probably be fine at any price. Near term, you could be stuck in a liquidity crunch.

    Most “investors” I know are waiting for the spring/summer market, and calling it a cycle, since rents can only rise 20% so many years in a row before the government overreacts with policy that will (right or wrong) contain price growth.

    • Reply
      alvi 3 months ago

      Rents have peaked-condo investors beware the spring market for condos may not be as strong as forecasted, condo supply is continuous, the outpeformance in last 3 years was the result of stress test.
      Folks be careful

    • Reply
      SH 3 months ago

      The vast majority of government meddling in the housing market is to prop it up, not to cool it down. Naturally you approve of government intervention when it helps YOU but oppose it when it helps others.

      Although real estate prices aren’t necessarily correlated to local incomes (due to foreigners displacing Canadians), rents most certainly are. Rents can only go up 20% year after year so long as locals can pay them. Rents reached a ceiling in 2018 and have stagnated since while rental postings on MLS have soared. No speculator buying a condo at today’s prices can hope to be cashflow positive. They are banking solely on government and central bank meddling to continue pushing prices up. The may well be right, nobody knows the future.

  • Reply
    Trevor 3 months ago

    The US has a 20% increase in refinancing, and rates are at record low. Luxury market is in the crapper. But Toronto isn’t New York. Condos can easily be more expensive than detached houses.

    https://ny.curbed.com/2020/3/3/21161850/best-nyc-neighborhoods-buyers-2020

  • Reply
    Ivan Rothwell 3 months ago

    Rate cut to 1.25% from BOC today. Does that mean people should wait for a cheaper mortgage?

    https://www.bankofcanada.ca/2020/03/fad-press-release-2020-03-04/

    • Reply
      Josh G. 3 months ago

      No, usually they pass on 10 bps for ever 15bps from the central bank. Some banks were at 1.99% before the cut though, so I’m not sure how many are going to be keep to lend and lose out to inflation at 2.4%.

      What I’d like to know is why HELOCs and credit cards went up in advance? The cut was well known by the market.

      • Reply
        Ethan Wu 3 months ago

        You’re on the money with the inflation comment. Canada has been looking at a cut since January, which is why the loonie reversed course against the greenback. That’s going to mean higher costs for everything, when inflation was already running at 2.4%, outside of BOC target.

        They aren’t going to pass on all of the cuts, because they can’t. They’re responsible to shareholders first and foremost.

  • Reply
    CJRay 3 months ago

    I’ve said this before but it has become more and more obvious with MLS; almost all properties in the GTHA are double-listed. They have 2 separate listing numbers and in some cases, the icon for the same house is in two locations on the same street.. WTF Check it out yourselves.
    Seriously! These get double-counted in the sales totals!! Someone should be going to jail for this fraudulent behavior. Maybe it’s rampant in all areas of Canada with the MLS??? People are rushing into ridiculously over-valued RE based on erroneous information. People need to educate themselves on this criminal behavior.
    The question is, who would best be able to investigate this?

    • Reply
      RobertW 3 months ago

      Gives new meaning to Multiple-Listing-Service (MLS)!

    • Reply
      backwardsevolution 3 months ago

      “Who would best be able to investigate this?”

      Well, don’t look to the media because they’re in bed with the real estate industry.

      And don’t look to your government because they’re in bed with the real estate industry too.

      The real estate and finance industries run the government. To look into what you’ve brought up would be providing consumer protection and transparency, which would mean going against their interests.

      What you have brought up doesn’t surprise me in the least. It is what I’ve come to expect.

      Good luck.

  • Reply
    Asterix1 3 months ago

    Condo market is done! Expect falling prices as sales dry out and more projects are finalized. Peak pricing has been reached. Makes no sense to buy at those levels, to live in one, or rent it out. It’s become a losing proposition in 2020.

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