Toronto

Toronto Real Estate Prices Slip Lower, But The Size of Losses Shrink

Toronto real estate showed signs of improvement from last year, but that doesn’t exactly say much. Toronto Real Estate Board (TREB) numbers show sales improved in July, printing a huge jump. Last year’s numbers were hampered by policy changes, so it isn’t the great news it appears. Despite showing big gains, most numbers indicate it was the second worst July in years.

Toronto Real Estate Prices Drop From Last Month

The price of a typical home fell on a monthly basis. TREB reported a benchmark price of $768,400 in July, down $3,700 from the month before. In the City of Toronto the benchmark fell to $838,900, down $1,300 from June. The monthly change had varying impacts on the annual price change.

Greater Toronto Benchmark Price

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

Source: TREB. Better Dwelling.

The annual change showed signs of improvement. TREB’s benchmark in July is down 0.59% from last year, better than the 4.76% decline we saw last month. The City of Toronto’s benchmark annual benchmark is 3.8% higher, up from 1.29% the month before. It’s not last year’s 18% and 20% respectively, but it could be worse.

Greater Toronto Benchmark Price Change

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

Source: TREB. Better Dwelling.

Median Sale Price Rises Over 7%

The median sale price of a home across Toronto leaped higher from last year. TREB reported a median sale price of $670,000, an increase of 7.02% from last year. The City of Toronto’s median sale price came in at $650,000, up 10.26% from the same time last year. Median prices are not adjusted to size or quality, but they’re popular with foreign buyers.

The Average Sale Price Is Up Over 4%

The average sale price of Toronto real estate is up from last year, across the board. TREB reported an average sale price of $782,129 in July, up 4.81% from last year. The City of Toronto saw an average sale price of $824,336, up 8.54% from last year. Average sale prices aren’t indicative of what you would pay for a home, but a better indicator of dollar flow. That being a positive here.

Greater Toronto Average Sale Price Change

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

Source: TREB. Better Dwelling.

Toronto Real Estate Sales Rise Over 11%

The volume of Toronto real estate sales showed big improvements from last year. TREB reported 6,961 sales in July, up 17.56% from last year. The City of Toronto represented 2,574 of those sales, up 11.76% from last year. Before you get too excited about the jump in sales, last year was the biggest drop in sales since 2009. The revision of last year’s sales also drops it down another 52 homes. Other than July 2017, you would have to go back a looong time to find a July this slow.

Greater Toronto Sales To New Listings

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

Source: TREB. Better Dwelling.

Inventory Drops In The City, Rises In The Suburbs

Inventory is off of historic lows, but still remained relatively tight. TREB reported 13,868 new listings in July, down 2.13% from last year. The City of Toronto represented 4,511 of those listings, up 0.26% from last year. New listings fell in the suburbs, but made a minor increase in the city.

The total number of listings for sale also showed the opposite trend. TREB reported 19,725 active listings, up 5.19% from last year. The City of Toronto represented 5,479 of those active listings, down 3.87% from last year. Inventory is up in the suburbs, but lower in the actual city, compared to last year.

Greater Toronto Active Listings

The number of listings available for sale in May 2018, across Greater Toronto.

Source: TREB. Better Dwelling.

Last year’s wreck that was Toronto real estate is in the rear view mirror, but we still have a tricky read on direction. We’re comparing this month to numbers that were hit with an overreaction to policy changes. The policy changes made last July one of the worst in recent history. Beating it might not be the recovery sign it appears to be. Reporting the second worst July in a long time isn’t exactly a reason to celebrate, is it?

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35 Comments

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  • Reply
    AgentX 2 weeks ago

    Opened up the email they sent to Realtor’s this morning, and it started with how important real estate sales are to the economy. I was thinking, “here we go…”

    Thanks for the quick historical comparison. I’ll email you some numbers later with thoughts. Much appreciated.

    • Reply
      Paul 2 weeks ago

      I disagree, this is the first sign that it was the bottom. We’re shaking off the policy changes, and moving higher.

      • Reply
        Andrew 2 weeks ago

        or it’s a bull trap

      • Reply
        Bluetheimpala 2 weeks ago

        Yes Paul (wink) we’re in recovery. Please ‘jockey on’ and make sure ALL of your clients know this is a great time to buy. I mean, how can RE in Southern Ontario go any lower? It’s already come down a MASSIVE 15%! That’s like a whole $100K! I’ll let you puke up whatever narrative you feel is appropriate. Go. Go now. Pappa Blue need you to spread your wings and fly! BD4L.

      • Reply
        vnm 2 weeks ago

        Up up and away my beautiful balloon.

  • Reply
    Ian 2 weeks ago

    Oh lordy, the spin I heard on the news this morning. “Stable” “recovery” “improving”

    It’s a downtrend. It needs to break it’s downtrend before you can say “recovered.” Until comps break above $816,000, it’s trending lower.

    https://imgur.com/4oYFnwO.png

    • Reply
      Bob 2 weeks ago

      Ian,

      I agree, charts and numbers do not lie. To me if we were to go strictly by charts we literally had a dead cat bounce that created a new high for the year in may at 772k. Going by the chart the trend is beginning to move downwards to test a new low.

      Anyone that argues with what I say is clearly lying to themselves or saying the numbers are made up

    • Reply
      Beh G. 2 weeks ago

      And that’s for the magical (i.e. fairy dust improved) “benchmark price”. If you look at the average price charts for both Toronto and 905 detached properties, they look even worse – particularly for the 905 area.

      Basically if you’ve purchased a detached house in the 905 area at any time since April 2016, on average you’ll be under water once you include the closing costs even without adjusting for inflation.

  • Reply
    Beh G. 2 weeks ago

    Absolutely mind-boggling how so many of the headlines and articles put such a possitive spin on such disappointing data (“Toronto Real Estate Market Sustains Recovery”, “Both Sales and Prices Up”, etc.). Here’s what you get when you look at TREB’s report in detail:

    * Toronto average detached price down for a second month in a row – down 5.4% from the May peak and 14.5% from the all time peak!

    * 905 average detached price also down for a second month in a row – down 3.4% from the May peak and 19.3% from the all time peak!

    * GTA Active listings, nearly 50% above the 3 year average and near 3 year highs (i.e. inventory not being absorbed) !

    * Sales to AL ratio dropped compared to June (i.e. absorption rate declined).

    * GTA sales are actually down compared to last July (which was already a pretty terrible month)!

    I sense a real push from the RE industry to artificially raise demand so that they can get rid of the overpriced properties they speculatively bought in 2016/2107.

    • Reply
      TO Millennial 2 weeks ago

      I work in a newsroom, they send a summary of opinion and numbers to reporters, not the actual report. When they release the data into a long weekend (they normally don’t release them on Friday), they are almost certainly trying to bury an indicator.

      I imagine after these numbers get torn through, we’ll get the real picture. BD does a great job pulling up context numbers, which helps a lot in understanding the bigger picture.

  • Reply
    Wajmah 2 weeks ago

    All signs point to March 2018 being the bottom of the market. We’ve seen numbers improve straight through. It’s hard to ID the bottom, but that’s when you make the most money on a home.

    Nice and balanced post today, it was important to mention that last year was an artificial month to be compared to. People under normal circumstances would not act that way, and it needs to be noted.

  • Reply
    David 2 weeks ago

    All the sales data is very general when looking at neighbourhoods but the drop in inventory is a problem. The sub-1 million market for homes is still very active in certain neighbourhoods.

  • Reply
    Multi Units 2 weeks ago

    “The City of Toronto saw an average sale price of $824,336, up 8.54% from last year”

    I think YoY stats are what matter the most. Obviously the Spring of 2017 was an investor fueled frenzy that quickly reversed but it does look like the City of Toronto is back on track to slow and stable price growth.

    • Reply
      Housing Bear 2 weeks ago

      Some people are calling this a bull trap but I think we are just following Vancouver. They had a drop off after they introduced their FBT in summer 2016. 8-12 months later they were showing gains again. I haven’t checking on Van since January of this year but everything was at least going great up until then. I bet Toronto does the same. You’re probably the expert though, considering you own multiple units. What are your thoughts?

  • Reply
    Justin Thyme 2 weeks ago

    Sees to me, the graphs all would indicate that things are flattening out, just like the stock market. They go up a bit, they go down a bit, they go up a bit, they go down a bit.

    Will it last?

    Maybe, maybe not.

    Depends on how stupid Trumpism gets, and how long it lasts.

    But even then, Trumism is a symptom, not the cause.

    • Reply
      Housing Bear 2 weeks ago

      Ladies and Gentlemen I give you the Oracle of Ontario, AKA Mr reverse mortgage mania, AKA bounce the last check to b***ch slap that banker bro, AKA 15% annual stock returns ain’t no thing but a chicken wing, AKA Ice Cold Intersection graph analysis. AKA throw all your old theories out cause this ain’t what your daddy taught you no more……………………….. I give you….. THE ONE, THE ONLY, JUSTIN THYME!

  • Reply
    Justin Thyme 2 weeks ago

    Seems this place is getting really, really cluttered with multiple avatars of the same person having a conversation with themselves in some ‘mutual admiration’ self-promotion vein.

  • Reply
    Housing Bear 2 weeks ago

    AKA Mr Only non biased new source is the China Daily………. AKA the CPC owned paper is the truth, the whole truth and nothing but the truth………………………..TRUTH!

    • Reply
      Grizzly Gus 2 weeks ago

      Lol woops was posting under a name I use elsewhere. It was I calling you out JT…………. AKA Mr. Economist don’t know a thing so watch this teacher whip, now watch him nay nay

  • Reply
    Bluetheimpala 2 weeks ago

    You’ve made Blue laugh. Blue likes jokes. BD4L.

  • Reply
    Justin Thyme 2 weeks ago

    Stock price for TD Canada Trust

    Feb. 13 2009 $18.58
    Aug. 2 2018 $77.15

    In some nine years, it doubled and then doubled again.

    $250,000 then is worth $1 million mow.
    Plus it consistently returned quarterly dividends, upwards of 8-10% yearly.

    And it is totally liquid. You just put a sell order in on qtrade, and the money is yours. No mortgages, no moving, no relocation, no downsizing, no tenant problems, no rental problems, no books to keep, no complicated income tax forms, absolutely hassle free. Sit back and enjoy the income.

    This garbage about smart money using real estate as an investment is just that – garbage. No money in it. Too many liquidity problems. Only small-time ma and pa investors dabble in it. Just pissing their money away, when they could be making BIG money.

    If you are smart money, and you are going to leverage your home equity to buy an investment, you are going to use the stock market, not real estate.

    That’s why BD followers and pundits will never understand what is really happening with real estate prices. They keep thinking that real estate is the ONLY investment choice for leveraged money. It’s only a vehicle for leveraging into the really big money.

    • Reply
      Grizzly Gus 2 weeks ago

      I think this is maybe a strategy you just uncovered when trying to research a way you could have made 15% annual returns the last decade. Ever hear of a margin account? You can borrow money to speculate on stocks.

      Also in your example you are taking a post Great Recession low TD stock price vs a number that is impacted by the height of our bubble. Sure smarter money if taking out home equity to invest may choose stocks over more exposure to RE (TD doesn’t have exposure to RE?) but the big problem is that the bulk of speculation in RE is not smart money. When average joes all of a sudden are talking about their single asset leverage strategy be afraid. Furthermore, even if all of the HELOC debt was used solely for stock investing, you still run the risk of over leverage. A bad recession brings down RE and your stocks, your debt stays the same. Now what?leveraging an asset that has been doing verywell, potentially in bubble territory, to make other investments is still a risky bet, you have to a lot of confidence that the underlying asset your are leveraging will not have more than a very minor hiccup to its price. Does that still not count as irrational exuberance? Maybe you don’t understand price?

      Also, you clearly have zero idea what your talking about because yesterday you were talking about doing the above strategy with a reverse mortgage. First you can only do this close to retirement, a period where you should be making less risky investments (more bonds vs stocks). Second, why not do a interest only HELOC instead? You can beat the interest on the spread and if the market recovers before you die you have a better chance of pulling out equity. Could also sell and rent. Last, don’t mess with me JT…………. AKA single stock strategy star…….AKA 20/20 hindsight hero………… AKA i could pimp capitalism but I prefer to be a Marx shark!

  • Reply
    Absolutely the smartest man here. 2 weeks ago

    Did Justin thyme sayvtherees no money in real estate? Lol. I’ve got 500k from an 8yr and 90k real estate deal that says otherwise.

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