Toronto

Toronto Real Estate Sales Jump Double Digits, Just Under Typical Volumes Again

A big Swiss bank recently ranked Toronto real estate the second biggest bubble in the world, but the city can’t hear them. Toronto Real Estate Board (TREB) numbers show price growth accelerating in September. The increase in growth comes after sales and inventory  returned to typical volumes.

Toronto Real Estate Prices Rise Over 5%

The price of a home across Greater Toronto advanced further last month. TREB reported a benchmark price of $805,000 in September, up 5.23% from last year. The City of Toronto benchmark hit $890,000, up 5.74% over the same period. These are huge numbers for growth, and most of the movement is in the condo apartment market.

Greater Toronto Benchmark Price

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

Source: TREB. Better Dwelling.

The rate of price growth is heading higher, and prices are getting  close to the all-time high. The 5.24% 12-month increase is the fourth consecutive month it’s shown growth. It’s also the highest annual growth since January 2018. A lot of this growth has to do with the comparison to last year. Growth following a period of negative growth, always looks abnormally high. That’s the market trying to figure out where the natural level should be.

Greater Toronto Benchmark Price Change

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

Source: TREB. Better Dwelling.

The median sale price of a Greater Toronto home is showing growth, but gives a very different picture. TREB reported a median sale price of $720,000 in September, up 5.88% from last year. The City of Toronto median sale price high $738,000, up 6.95% from last year. This means more than half of homes sold in TREB were 10.55% below the “typical” price. In the City of Toronto, more than half of homes sold 17.02% below the typical price as well. That’s a big gap between expectations and reality.

The average sale price showed similar growth to other price segments, but came in much higher. TREB’s average sale price reached $843,115 in September, up 5.81% from the same month last year. The City of Toronto average hit $913,096, up 5.64% from the same month last year. Average prices aren’t adjusted for size, so they’re most useful for understanding volumes.

Greater Toronto Average Sale Price Change

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

Source: TREB, Better Dwelling.

Greater Toronto Real Estate Sales Make Double Digit Jump

Sales of Greater Toronto real estate made a big bounce back towards normal levels for the region. TREB reported 7,825 sales in September, up 21.22% from the same month last year. The City of Toronto represented 2,995 of the sales, up 21.35% over the same period. For context, the volumes are 1.91% below the 5-year average for the month. Huge annual improvement, but it doesn’t quite make the market “hot.”

Greater Toronto September Home Sales

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

Source: TREB, Better Dwelling.

Greater Toronto Real Estate Resale Inventory Is Falling

The number of new homes for sale might be swelling, but resale inventory is falling. TREB reported 15,611 new listings in September, down 1.94% from the same month last year. The City of Toronto represents 5,810 of those listings, up 6.48% over the same period. A drop in new listings, and much higher sales helped to firm up total inventory on the market.

Greater Toronto Sales To New Listings

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

Source: TREB, Better Dwelling.

The number of active listings, a.k.a. total inventory, made a sharp fall from last year. TREB reported 17,254 active listings in August, down 14.11% from the same month last year. The City of Toronto represents 5,479 of those listings, down 6.02% over the same period. For context, this number is 0.75% higher than the 5-year average for the month. Falling inventory might seem sharp, but it’s close to what’s typical for the period.

Greater Toronto September Active Listings

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

Source: TREB, Better Dwelling.

Greater Toronto real estate is seeing sales and inventory return to normal. Price growth is moving at a faster than usual pace, accelerating into winter. Part of this has to do with the way asset prices follow negative growth. Following negative periods of growth, markets tend to overcompensate. However, a lot of this is the expectations politicians will inject money into the market.

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9 Comments

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  • Reply
    Brian Chapman 2 months ago

    At what point does Canada realize closed access to property records, and only industry numbers means you have no clue what price you’re paying. No other country does that, it’s kind of ridiculous.

  • Reply
    Miguel Bosson 2 months ago

    Investor driven. My neighbor was telling me prices are going to rise, because all politicians are promising to “help” with a developer bail out.

  • Reply
    SUMSKILLZ 2 months ago

    There’s about 50, 20 year old homes on my northern 905 suburban street. Almost all of them changed hands at least once between 2010 and 2017. Right now I know of five that are getting ready to list soon. There might be more. People see $$$$$ instead of community. So sad.

  • Reply
    WorldClassCitizen 2 months ago

    Well I guess its true – prices only ever go up in Toronto.

  • Reply
    Dave 2 months ago

    Curious as to whether Toronto will follow Vancouver’s downward trend starting near end of this year/next year

  • Reply
    FOMO 2 months ago

    Inventory of new detach homes under construction is down 50% since 2017 peak

    Incomes up, mortgage rates down -and prices for detached homes in the 905 still down from the peak.

  • Reply
    Abhishek 2 months ago

    “Part of this has to do with the way asset prices follow negative growth. Following negative periods of growth, markets tend to overcompensate. However, a lot of this is the expectations politicians will inject money into the market.”

    I am not convinced with your first argument that asset prices tend to overcompensate after a negative growth period. Is it same as momentum that you are talking about – in either direction?

    If so, could it be possible that the root cause of this momentum has been the promises of politicians to inject money. Is their a chart that shows the sales numbers immediately improving (after taking out seasonal variations etc.) after the political party announcement?

    I agree with you that this is the reason for euphoria, not a sudden finding of perfect balance between demand and supply.

  • Reply
    Wen Moon 2 months ago

    Who cares if you’re not convinced, that’s how asset prices work. They walk, they don’t go in a straight line. This is basic money. Unfortunately Canadians are used to numbers being “smoothed” to eliminate any troughs on price walks.

  • Reply
    David 2 months ago

    Foreign “investors ” washing more money in Toronto now that BC has a speculation tax

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