Greater Toronto real estate is back to a supply crunch. Toronto Regional Real Estate Board (TRREB) data shows sales jumped to a multi-year high for January. The multi-year high for sales, met with a low for inventory – sending prices soaring.
Greater Toronto Real Estate Prices Rise Over 8%
The price of a typical home reached a new all-time high according to the composite index. TRREB reported a benchmark price of $828,200 in January, up 8.72% from last year. The City of Toronto reached $913,700, up 8.76% from last year. The trend is driven by condo apartments, which are pushing double digit gains.
Greater Toronto Benchmark Price
The price of a “typical” composite home across Greater Toronto.
Source: TREB. Better Dwelling.
The rate of growth is accelerating, to the highest rate in years. Both regions printed numbers larger than the month before. The 12-month rate of growth is now at the highest level since November 2017. Growth is driven by apartments, which are now well into double digit annual price growth. Single-family homes are below peak value as of now, but are seeing prices climb.
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 was much lower, but made a substantial climb from last year. TRREB saw a median sale price of $735,000 in January, up 13.08% from last year. The City of Toronto median sale price reached $725,000, up 12.06% from last year. Considering the price of a “typical home” is more than 10% higher than the price of half of homes sold, the benchmark has limited use in this report.
The average sale price was actually higher than the benchmark, in both sticker and growth. TRREB’s average sale price came in at $839,363 in January, up 12.17% from last year. The City of Toronto average reached $884,385, up 13.72% from last year. Averages are easily skewed, since they aren’t adjusted for size or quality. They are helpful for understanding dollar flow though.
Greater Toronto Average Sale Price Change
The annual percent change of the average sale price of all homes.
Source: TRREB, Better Dwelling.
Toronto Real Estate Sales Have Biggest January Since 2017
Greater Toronto real estate sales recovered from the new regulations, and then some. TRREB saw 4,581 home sales in December, up 14.27% from last year. The City of Toronto represented 1,603 of those sales, up 12.73% from last year. This is the highest number of January sales since 2017, and is 6.09% higher than the 5-year median volume for the month.
Greater Toronto January Home Sales
The total home sales across TREB by year, for the month of January.
Source: TRREB, Better Dwelling.
Toronto Real Estate Inventory Made A Big Drop
Who wants to sell when prices are rising rapidly? Few people in Toronto, apparently. TRREB reported 7,839 new listings in January, down 17.13% from last year. The City of Toronto represented 2,633 of those listings, down 16.25% from last year. The big drop in new listings helped to drive total inventory to a multi-year low for the month.
Greater Toronto Sales To New Listings
The number newly listed units per month, in contrast to sales.
Source: TRREB, Better Dwelling.
Fewer new listings, and higher sales made for scarce January inventory. TRREB reported 7,772 active listings in January, down 35.03% from last year. The City of Toronto represented 2,464 of those active listings, down 31.08% from last year. It was the lowest level of active listings for January since 2017, and 33% below the 5-year median for the month. Inventory was tight.
Greater Toronto January Active Listings
The total of active home listings across TREB by year, for the month of January.
Source: TRREB, Better Dwelling.
Greater Toronto real estate is in a supply crunch, with rising sales and falling inventory… again. Sales and price growth are both above levels seen prior to the rollout of the B-20 Guidelines. Anecdotally, agents are also back to seeing bidding wars.
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Why on earth did they change their name to TRREB? ! That is the perfect embodiment of how useless of an organization they are. They can’t tell the difference between inconvenience and progress.
Can attest to the return of bidding wars, and it feels more frothy than it did during the 2017 detached-we’re-running-out-of-land panic. Which, if you recall how that ended, it wasn’t exactly a great time for many.
I can’t stress this enough though. If you’re buying a condo, double, triple check the maintenance fees and how much they’ve increased over the past few years. A lot of new builds are going to rise, and eat a lot of your profits.
Perfect timing. New report from TD:
Corporate debt just reached a new milestone. TD economics, this will “amplify the severity of a downturn.”
https://www.bnnbloomberg.ca/record-high-company-debt-hangs-over-canada-s-economy-td-says-1.1384537
I guess housing really never will go down in Toronto. Given how already indebted consumers are maybe I should just take the plunge and go into debt up to my eyeballs Like everyone else in this country. Doesn’t seem to be impacting them in the slightest
Can’t tell if you’re serious. I’m actually having this though right now.
I was able to become a millionaire making 55k per year in Toronto. This is real
This mania will end this or next year when condo investors realize renters can’t pay high rent as they do not have a high income to support it. We now see 50% more condos for rent in January yoy listed on MLS … condo investors who lover prices get tenants!
This seems like a pipe dream. More and more people are living together to afford rent because they need a roof over their heads.
Rents have stabilized over the past 2 years. Lots of inventory on Bungol and other sites. Rents, unlike condo prices, are far more heavily correlated to local incomes. Unless incomes increase dramatically or lots more foreign students with wealthy parents are admitted into the country (and the foreign student population in Canada exploded 68% between 2014 and 2018, not sure how much higher it can go?), I don’t see how rents can be pushed much higher. People buying condos at these nosebleed prices clearly aren’t doing so for rental yield, since there is no way to break even at these levels. They’re buying for capital gains.
Most people that buy are not even real investors. They took load HELOC and buying a condo unit to get rich fast .. while they loosing on monthly rental they hope they will sell in 3 years for 30% profit but those days are gone long time ago.
There is a maximum number of people that can rent a condo. Its law in Ontario and property management doesn’t allow for example 3 adults to rent 1 bedroom condo. Yes 2 friends can rent 1 bedroom for $2200 / month but they will not rent it for $3000