Toronto

Toronto Real Estate Sales Down Over 35%, Listings Jump Over 147% In February

Toronto Real Estate Sales Down Over 35%, Listings Jump Over 147% In February

Toronto real estate continued to see a cooler market in February. Toronto Real Estate Board (TREB) numbers show prices are still higher, but they’re tapering fast. This occurred as sales declined, and inventory climbed for the eleventh consecutive month.

Toronto Real Estate Prices Are Seeing Gains Taper

The sale price of a home is still higher than last year. TREB’s composite benchmark price, a.k.a. the price of a typical home, hit $751,700 across all regions in February. That’s up 1.14% from the month before, bringing the annual gain to 3.21%. The benchmark in the City of Toronto hit $807,500, a 1.67% increase from the month before. The annual increase in the City of Toronto is now 9.54%. These numbers were driven mostly by the condo market.

Source: TREB. Better Dwelling.

The benchmark price increased on the monthly numbers, but the 12 month trend is worth taking note of. The increase of 3.21% is down from peak growth of 31.26%, obtained less than a year ago. It’s also the lowest 12 month increase since May 2013. Balancing last year’s rise with a few months of below median growth would be the healthy thing for the market to do. Okay, maybe more than a few months would be needed.

Source: TREB. Better Dwelling.

Some people are old school, and aren’t into the board’s opaque benchmark, for them there’s the median price. TREB reported a median sale price of $656,000, an 8.25% decline from the year before. The City of Toronto had a median sale price of $650,000, a 6.82% increase from the year before. The shift to condo sales is the big influence here as well.

The average sale price continued its negative run, to the lowest level in years. TREB reported an average sale price of $767,818, a 12.35% decline compared to last year. This indicator is not useful for determining how much you should pay for a home. However, it’s great for determining dollar and upgrade flow. For example, typically when people sell their home, they make an upgrade buy as well. Declining dollar volumes can mean the seller had another home, are leaving the city, or they’re waiting to buy their next place. TREB’s own survey showed a significant number of sellers had no immediate plans to buy again, so this isn’t a surprise. The takeaway is buyers should be asking themselves, “what are sellers are waiting for?” If it’s an awesome time for you to buy their house, why isn’t it an awesome time for them to buy someone else’s?

Source: TREB. Better Dwelling.

Toronto Real Estate Sales Decline 35.43%

Toronto real estate sales are declining, and fast. TREB reported 5,175 sales in February, a 35.43% decline, form the year before. Breaking that down, the suburbs (905) saw 3,162 sales, a 37.58% decline compared to the same month last year. The City of Toronto saw the other 2,013 sales, a 30.32% decline compared to last February. Declining sales aren’t a big issue by itself, since tight inventory can drop sales. Although that wasn’t the case this month.

Source: TREB. Better Dwelling.

Toronto Real Estate Listings Up Over 147%

There was significantly more Toronto real estate inventory. TREB reported 10,520 new listings, up 6.98% from the month before. This represents a 28.76% increase from last year. This is the 13th month new listings were greater than sales, resulting in higher inventory levels.

Source: TREB. Better Dwelling.

Active listings, the total available listings for sale, are starting to get high – even for February. TREB reported 13,362 active listings, up 12.34% from the month before. That adds up to a massive 147.44% increase compared to last year. For context, the median number of active listings for all months, over the past 2 years, is 12,926. Yes, last year did have a “shortage” of inventory, and an increase was expected. Yes, the amount of inventory is higher than normal however.

Toronto saw prices taper, as sales declined and inventory climbed. Worth noting that many mortgages approved before mandatory B-20 stress tests closed or expired at the end of February. This month we should start to see the impact of stress testing, and whether it will have a further impact on prices.

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34 Comments

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  • Reply
    Mark 9 months ago

    April and May is going to be when we see the biggest impact. No way this year’s buyers are going to pay last year’s premiums. Sorry, but if you bought in a panic last year, prepare to lose a loot of cash.

    • Reply
      Dennis 9 months ago

      Why is nobody buying detached homes?
      Most of the listed prices are 20+% lower than last year.
      Sales are down 40% wow.

      It’s like they have completely gone out of style.
      Maybe another -20% reduction will get some buyers to come back.

    • Reply
      John 9 months ago

      It’s important to speak genuinely regardless of which side of the fence you’re on.

      I’d rephrase your statement to: If you bought in a panic last year, prepare to hold your property for 5 to 10 Years, or lose a loot[sic] of cash selling.

      Nothing is truly gained or lost unless the property changes hands.

      • Reply
        MH 9 months ago

        You concept of “being genuine” is rather selective. Interest payments, upkeep payments and property tax payments over all these years are lost for sure (you have to take very real dollars out of you pocket to meet these obligations). All the while your hopes to offset these losses with capital gains are just that… hopes.

      • Reply
        Alistair McLaughlin 9 months ago

        If they bought in a panic (and that’s what the bidding wars of last spring were), who’s to say they won’t list in a panic?

        It is entirely possible that frenzied buyers inspired by FOMO will suddenly become rational buy-and-hold long term planners. It just isn’t very likely.

  • Reply
    Alban 9 months ago

    January was the bottom. You can see this month the benchmark is higher than last, and the chart shows a “rebase.” It’s just reseting before ripping higher again.

    • Reply
      Sammy 9 months ago

      This. Condo market is booming, anyone that can’t afford to get in will be paying someone else’s mortgage for the rest of their life as the gap widens. There’s only so many options most people had, now they’re being eliminated as millennials grow up.

      • Reply
        Lessdanadalla 9 months ago

        You must be one of those RE mercenaries pushing people into financial suicide. We reached the plateau back in Q3 2017, it’s all downhill from here …. and you know it. There is no such a thing as soft landing, we’re witnessing the end of the era of unsustainable growth, the market is going down whichever way you look. For many, the next decade will resonate with economic hardship, uncertainty and broken dreams ….

      • Reply
        carlton 9 months ago

        Sounds like you should by 5 more properties before the prices starts ripping higher again! Brilliant!

      • Reply
        JT Epic 9 months ago

        AHAHAHAHAHAHA…..hahahaha…hahaha…ha.

        ^^^^^^Homeowners or RE agents for sure. Delusional.

        Guys, (and Gals?) this is not going to be fun. Just trust me.

      • Reply
        Alistair McLaughlin 9 months ago

        Alban and Sammy, I am a fortune teller. I see two Audi repossessions before the year is out.

    • Reply
      Functioning Brain 9 months ago

      Good point!

      You should buy as many condos and a few detached ASAP before it rises again, prob be around 5mil for 500sq feet in Ajax by December.

      BUY NOW!

      Never a better time, don’t miss this opportunity. If the banks won’t let you figure it out! But hurry man, you need to buy now before it goes up again. It is going to go up literally forever!

      • Reply
        Joe 9 months ago

        What’s even better….. open as many high rate credit cards as possible, borrow money with high rates from any seedy back ally person you can find. Just get enough to put in a downpayment. Buy multiples if you can. When the condos continue to “rip” up in price, you pay every card off and every person you borrowed from in the last year prior to selling.

    • Reply
      Andrew 9 months ago

      Better Dwelling “Interest rates are rising, inventory is rising, buying power is dropping, sales are dropping”

      Commenters “The prices are just getting ready to soar!” “I may have overpaid but I got the last condo, enjoy paying my mortgage suckers!”

      I sometimes wonder if we’re even reading the same articles.

      • Reply
        Mmr 9 months ago

        This is good news price is correcting without dragging the economy down. I will say price will keep dropping further for next six months before become more stable. Detached will lose more but condo price grown with either stop or start decline this year.

  • Reply
    Functioning Brain 9 months ago

    September

  • Reply
    Al Daimee 9 months ago

    We’re going to see continued negative numbers for the next 5 months. Comparing to an abnormal first half of 2017 is somewhat unfair, so you need to also compare to 2016 and prior whne it comes to sales vs. inventory trends.

    Even now, there is a lack of quality out there within the 416 areas. The flight to quality began last summer and there is a growing separation of wheat from the chaff.

    • Reply
      Yu 9 months ago

      Okay, but instead of inventory, let’s look at sales.

      Compared to 2017? Down.
      Compared to 2016? Down.
      Compared to 2015? Down.

      How far back do you recommend clients go to find your narrative? It feels like if we have to go before Uber was made, you’re reaching.

      • Reply
        Doodool 9 months ago

        Active listings – Year
        15,969 – 2013
        14,019 – 2014
        12,793 – 2015
        10,902 – 2016
        5,400 – 2017
        13,362 – 2018

        We are back to a more balanced normal market. Also keeping in mind population is larger in 2018 vs 2013/14 etc and also lots more homes have been built since then (1000’s) yet inventory levels today are just normal when you excluded the outlier month of Feb 2017.

        • Reply
          Yu 9 months ago

          Didn’t even look at the active listings, were only looking at the sales. Even the CMHC says Toronto’s fundamental values are 50% unjustified from 2010 to 2016, which means $150k was overvalued BEFORE 2017. Applying the same logic, yes they include every possible factor including immigration, bond rates, etc.

          By the CMHC’s estimate, a government owned agency, Toronto prices are almost 24% overvalued on the composite. This is likely even higher for condos.

    • Reply
      Ronald 9 months ago

      This! I don’t get how all properties are usually priced the same. With rise in supply, it is a buyer’s market now. Buy will only commit to the properties they love…”flight to quality” In general, it will be trending downward on price. However, I do not believe it is in the best interest of everyone that prices crashes. Don’t treat it as an investment, buy only if you plan on living in the property for many many years

  • Reply
    Trader Jim 9 months ago

    This is why I’ll never get Realtors. “abnormal first half of 2017” for inventory, so an increase doesn’t count. But abnormal price increases? Well, that won’t correct. It’s done, there’s no point in looking at history.

    In normal asset markets, abnormal amounts of liquidity see abnormal price movements. These abnormal price movements are CORRECTED when liquidity is corrected.

    Okay, buddy.

  • Reply
    Doodool 9 months ago

    Active listings – Year
    15,969 – 2013
    14,019 – 2014
    12,793 – 2015
    10,902 – 2016
    5,400 – 2017
    13,362 – 2018

    We are back to a more balanced normal market. Also keeping in mind population is larger in 2018 vs 2013/14 etc and also lots more homes have been built since then (1000’s) yet inventory levels today are just normal when you excluded the outlier month of Feb 2017.

  • Reply
    dman 9 months ago

    Based on Toronto median household income of $80,000 (which is generous and assuming no debt lol)

    Toronto single-family median price value is $240,000-$320,000.

    • Reply
      Mmr 9 months ago

      In ideal situation it should be. And Vancouver should be even low based on that assumption as there median income is even lower. I will say 200k for Vancouver.

  • Reply
    MH 9 months ago

    Will you look at that… things are really getting interesting:

    RBC Chief Sounds Alarm on Flood of Foreign Cash in Canadian Real Estate

    “We do not need foreign capital using Canadian real estate as a piggy bank,” David McKay, said Tuesday at a bank conference in New York hosted by the Toronto-based lender. “If capital is coming in to sit in a home, unproductively, and is distorting your marketplace and the livelihood of your residents — no thank you.”

    https://www.bloomberg.com/news/articles/2018-03-06/rbc-chief-warns-foreigners-using-canadian-homes-as-piggy-banks

    • Reply
      Mmr 9 months ago

      It does not matter at the end of the day…as long as governments allow foreign investment in real estate people who want to buy will keep doing it from outside Canada…plus banks are main winners from housing bubble now they are acting nice guy lol

    • Reply
      C 9 months ago

      Obviously.

      Just think, in the past 12 months…..

      Ontario government 15% foreign buyer tax, B20 for Canadians, change in regulations for foreign buyers at Canadian banks, federal government no longer allowing bail-outs of banks, Chinese vs Chinese in Canadian courts trying to figure out whose crooked money is whose in house sales gone sour, investigations of drug money laundering in real , enforcement of regulations in BC casinos…….and on and on and on it goes.

      Every level of government and all banks know that the flood of foreign money was dirty. Who even knows where they get their 35% deposits from?

      We might have had a sound banking system at one point, but I guarantee you that the majority of foreign buyers don’t have anywhere near the income to support their mortgages (supplied and guaranteed by you and I through our deposits, investments and CMHC).

      And that takes us to the brink of disaster, just like the “2008 subprime housing crisis in the US”.

      The new definition of a subprime mortgage–foreign buyer of Canadian real estate with borrowed down payment, no income history, no credit history, and no job in Canada!!!!!!

      We are in dangerous territory, and the proof I have, is every single move the government and banks have made in the last year to stop this shit show.

      I really do feel bad for Canadian families who are losing money as we speak.

      • Reply
        Mmr 9 months ago

        It’s our government fault to allow this. I am not sure what other government like uk and USA do but I think they are doing a better job then ours.

  • Reply
    Andreas Raujoan 9 months ago

    Fingers crossed for an all-out housing crash. Yes, we NEED one. No, the “gubment” ain’t going to help underwater debt slaves.

  • Reply
    NJ 9 months ago

    Those 17k to 20k plus active listings are going to hit the market in coming months based on the last few years numbers…and given the slump in sales is here to stay, hope treb will have real hardtime bringing people an altered crap report each month.

  • Reply
    Dman 9 months ago

    “Irrational exuberance is the psychological basis of a speculative bubble. I define a speculative bubble as a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increases and bringing in a larger and larger class of investors, who, despite doubts about the real value of an investment, are drawn to it partly through envy of others’ successes and partly through a gambler’s excitement.”

    -Nobel Prize-winning Yale University professor Robert J. Shiller from his book Irrational Exuberance.

  • Reply
    CJ Ray 9 months ago

    Nobody should trust the spew coming out of RE boards. Tim Hudak is CEO of OREA which tells you a lot. I’m not sure how a guy that imploded in politics because of his loose lips can be given a position like this. 6 months ago, he was blathering something about how dire a situation it was with the low inventory of SFHs. I notice the media isn’t beating down his door lately to get his opinion of where things are going.
    He seems like a nice guy and all, and he was my MPP at one time. But, that’s about all I can say.

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