Toronto

Toronto Real Estate Sales Crater Causing Prices To Remain “Virtually Unchanged”

Greater Toronto real estate sales are still frozen by the pandemic, but the inventory ratio is improving. Toronto Regional Real Estate Board (TRREB) described prices as “virtually unchanged” in May. Home sales predictably made a sharp decline, however not as much as inventory – helping to relieve pressure for prices to move higher.

Greater Toronto Home Prices “Virtually Unchanged”

Greater Toronto’s composite price slipped from its record high, but not by much. The price of a typical home across the region reached $870,000 in May, up 9.4% from the same month last year. In the City of Toronto, prices reached $966,900 – rising 9.8% from last year. Huge gains, but compared to a month before – Greater Toronto’s benchmark is down about $100, so not a new record.

Greater Toronto Benchmark Price

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

Source: TRREB. Better Dwelling.

The board described this as “virtually unchanged,” but the stagnation at a busy time led to lower growth. The 9.43% annual increase for May is lower than the month before. The rate of growth has now rolled back to the lowest level since January. It’s still high single-digit price growth according to the indicator, but it’s slowing.

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 prices also increased, but growth wasn’t nearly as ambitious as the benchmark measure. TRREB’s median sale price reached $754,500 in May, up 4.1% from a year before. The City of Toronto reached $785,000, up 4.3% from last year. This means more than half of homes in Greater Toronto sold at least 13.3% below the benchmark price. In the City of Toronto, more than half of homes sold 18.8% below the benchmark price. The median sale price isn’t adjusted for size or quality, however international buyers tend to prefer it over the more opaque benchmark price.

The average sale price more closely resembled movements in the median sale price, than the benchmark. TRREB’s average sale price reached $863,599 in May, up 3.0% from last year. The City of Toronto average sale hit $955,273, up 1.9% from last year. Since the averages aren’t adjusted for qualitative or quantitative factors, it’s best used as an indication of dollar volumes.

Greater Toronto Average Sale Price Change

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

Source: TRREB, Better Dwelling.

Greater Toronto Home Sales Fall Over 53%

Greater Toronto home sales predictably fell to the lowest May levels in years. TRREB recorded 4,606 sales in May, down 53.9% from last year. The City of Toronto represented 1,491 of those sales, down 59.9% over the same period. A drop in sales volume was expected across the country due to the pandemic. However, such a significant decline still has a big macro economic impact.

Greater Toronto April Home Sales

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

Source: TRREB, Better Dwelling.

New Listings Inventory “Balanced” With Sales

The number of new sellers listing their homes for sale made a similar drop as well. TRREB reported 9,104 new listings in May, down 53.0% compared to the same month last year. The City represented 3,312 of those sales, down 50.2% over the same period. Despite a similar drop in sales and new listings, total inventory didn’t fall nearly as much. The new listings ratio is technically now in balanced territory, meaning the market is priced correctly for demand at this ratio.

Greater Toronto Sales To New Listings

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

Source: TRREB, Better Dwelling.

The total number of homes for sale, or active listings, declined – just not as much as sales have. TRREB reported 11,448 active listings in May, down 42.8% from the same month last year. The City of Toronto represented 4,009 of the active listings, down 33.6% from last year. This tells us suburban inventory is disappearing much faster than inventory in the City of Toronto.

Greater Toronto April Active Listings

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

Source: TRREB, Better Dwelling.

Low volume trends tend to be the most difficult to gain insights from, since there’s fewer points of confirmation. Buyers and sellers are both at a standstill, with payment deferrals relieving immediate pressure to sell. There was a little steam taken out of prices, with the improved inventory ratio abruptly ending upward momentum. It won’t be clear if deferrals force more sellers than the market has buyers, until later this year though. However, experts are expecting to see mortgage delinquencies spike later this year, implying some sellers won’t be interested in liquidation unless forced.

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8 Comments

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  • Reply
    Trader Jim 1 month ago

    Genuine question here. Does anyone believe the benchmark price? Clearly it has low volume distortion if it’s no where near the median sale price. The national numbers and Vancouver aren’t even that bad.

  • Reply
    MC 1 month ago

    Heresy. Toronto prices will rise to the highest level ever, until its the most expensive place in the universe. People don’t need to pay mortgages, nor have jobs. Just up, up and away!

    • Reply
      Terrance 1 month ago

      Rents can even fall. Everyone will want to own a house, regardless of whether it makes sense.

  • Reply
    zalzon 1 month ago

    We are headed for a monetary reset.

    Essentially that means all savers will be cheated.
    Banks won’t let prices decline to market levels because of the enormous leverage they’ve built atop the real estate pyramid scheme.

    2008 gave a glimpse into what happens once price discovery begins to occurs in real estate followed by other areas.

    Also since 2008, the vast amount of the working populations’ wealth has been transferred by central banks to a select few using a variety of “monetary policy” techniques in anticipation of the Great Reset.

  • Reply
    Balky Bartokamous 1 month ago

    Gee who would have thought that sales would start going right back to normal as soon as people were allowed outside. The constant bears aren’t going to like this

    • Reply
      PK 1 month ago

      Yes, sales being down 53% and the worst May on TREB* is exactly the same as sales recovering. Stoopid bears.

      * TREB MLS data only goes back to 1996.

      • Reply
        Balky Bartokamous 1 month ago

        You must be real special to not understand that the reason sales were down was because of a total shutdown and listings drying up to nothing. Also yes sales are very much so recovering month over month so my statement stands correct.

  • Reply
    Grandv!ew 1 month ago

    As great Wolf Richter would say : “Noting goes to heck in a straight line” so it will ring true for our unregulated Canadian housing casino.

    Naturally bug spit and gyp rock dwelling bulls will have orgasmic 94 days ahead. Sales will go up from cataclysmic lows but never again reach so called ab “normal” sales levels. This is expected, it was predicted and people are warned(by multiple high caliber agencies) NOT to fall into the trap of unregulated industry that is keeping our one trick pony economy alive.

    We will revisit the subject of sales and prices in September……

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