Toronto

Toronto Real Estate Sales See Worst April In At Least 25 Years

Greater Toronto real estate is feeling the wrath of pandemic, but it’s not exactly clear how much. Toronto Regional Real Estate Board (TRREB) data shows sales made a big decline in April. That much is obvious. Prices are where it gets a little more muddy, with the benchmark price making a big climb from the month before. The median sale price on the other hand, made a very large and abrupt decline.

Toronto Real Estate Prices Rise… or Fall, Depending On The Indicator

The benchmark price of a home continues to climb, but it was the only ambitious indicator. Across TRREB the benchmark price of all homes reached $870,100 in April, up 10.2% from last year. The City of Toronto benchmark price hit $964,600, up 10.4% from last year. Both are higher than a month before, and a lot higher than they were last year.

Greater Toronto Benchmark Price

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

Source: TRREB. Better Dwelling.

The rate of growth for the benchmark quickly decelerated in the month. Both TRREB’s 10.2% increase, and the City’s 10.4% are lower than they were a month ago. Both shaving off a point from a month before. The deceleration was expected this year due to a slow Q1 in 2019, making the comparison much stronger. However, looking at other indicators, there is more to the rapid deceleration.

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 inched higher than last year, but didn’t make nearly the same jump. The median sale price across the board reached $732,000 in April, up 3.2% from the same month last year. The median for City of Toronto sales reached $749,950, up 4.2% from last year. Diving deeper, the annual increase is a little low – and that’s because of how much it fell from the month before.

The median sale price made a big dip from the month before, and is diverging from the benchmark. Across the board, the median sale price fell 6.8% from a month before, and 6.3% in the City of Toronto. This is a very sudden decline for the indicator. The median sale price is also 15.9% and 13.8% lower than the benchmark price, in the respective markets. That means more than half of people bought homes, more than 10% below the price of a “typical” home. Median sale prices don’t compensate for a change in sales mix, so exercise caution. However, median sale prices are preferred by international buyers over the benchmark. The real takeaway is somewhere in between both indicators.

The average sale price of a home is flat, and slipped a little in the city. The average sale price across the board came in at $821,392 for April, just 0.1% higher than last year. City of Toronto sales had an average price of $881,424, down 2.5% over the same period. TRREB also noted the seasonally adjusted average prices reached $894,745, and is down 11.8% from last year. The median is preferred over the average when looking at real estate prices. The average suffers a similar issue of not being adjusted for a change in sales mix 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 Fall To 25 Year Low

Toronto real estate sales were expected to come in low, but it came in at the lowest level in decades. TRREB recorded 2,975 sales in April, down 67.0% from last year. The City of Toronto represented 1,036 of those sales, down 68.0% from last year. This is the fewest number of sales for April, going through the 25 years of available data from TRREB. It likely goes back further though.

Greater Toronto April Home Sales

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

Source: TRREB, Better Dwelling.

Toronto Real Estate Listings Fall, But Not As Much As Sales

Buyers and sellers are mostly staying away from the market, but new listings fell a little less than sales. TRREB recorded 6,174 new listings in April, down 64.1% from last year. The City of Toronto represented 2,223 new listings in April, down 61.2% from last year. Twice as many new listings as sales is a very dramatic shift from where the market was heading.

Greater Toronto Sales To New Listings

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

Source: TRREB, Better Dwelling.

The sales to new listings ratio (SNLR) shows sellers are less deterred from participating in the market. The SNLR across TRREB reached 48.2%, and fell to 46.6% in the City of Toronto. The ratio is technically a “balanced market,” where the market is priced right for demand. However, this trend has deteriorated very quickly. In just February, this indicator was in a seller’s market, when prices climbed. In just two months, it has cooled to the lower end of balanced.

Total inventory made a sharp decline as well, but also not as much as the number of buyers. TRREB reported 10,561 active listings in April, down 41.44% from last year. The City of Toronto represented 3,470 of those listings, down 35.36% from last year. The market isn’t exactly flooded with inventory, but buyers are disappearing faster than sellers.

Greater Toronto April Active Listings

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

Source: TRREB, Better Dwelling.

The reason there’s been a lot of mixed takes on Toronto real estate is because it’s unclear how the market is doing. How it’s doing right now may not even be relevant to how it will do in a few weeks. Low transaction volumes tend to distort price movements. A few panicked sellers can drive prices lower in low volume environments. Likewise, a few panicked buyers can drive prices higher very easily in these conditions. Until the pandemic measures are lifted, and mortgage deferrals expire, it’s going to be extremely difficult to tell where the market is, and where it’s going.

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12 Comments

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  • Reply
    Pete 3 months ago

    Frank Knight didn’t even include Toronto on their list of luxury investment real estate markets. The people who think Toronto is a safe haven investment for legitimate international investors are delusional.

  • Reply
    OM 3 months ago

    Bain’s out with it’s forecast on automation doubling as a result of coronavirus impact. Twice the work with half the people. Accelerated headwind for labour markets, especially in low skill code areas like most of Toronto’s tech does.

    https://www.consultancy.asia/news/3203/bain-predicts-business-automation-activity-to-double-over-the-next-two-years

  • Reply
    straw walker 3 months ago

    Not including the virus, I see most of CDN’s personal debt mess as a directly related to the BOC action of continued lowering the BOC bank rate..
    This has further accelerated CDN’s debt problems. Rates instead should of been raised to stop the expansion of borrowing.
    Now the CDN economy is facing a huge debt that cannot be managed. This debt is not just personal and mortgage debt but also corp. debt.
    You cannot sustain and grow an economy on a debt.

  • Reply
    Ghl 3 months ago

    Time to face reality, that crappy house you bought for 150k isn’t worth 800k now. You are not better than well educated young professionals just because you got a crappy home for cheap.

    I hope the world comes to an end if housing dont become affordable.
    Maybe COVID19 is god telling people to stop being so greedy.

    • Reply
      Brad 3 months ago

      You sound like someone who badly wants to buy real estate but can’t afford it.

      • Reply
        Reality check 3 months ago

        You sound like a skilless uneducated person who bought early but some how thinks you are better because of that. No one in Toronto or Vancouver in mid level careers can afford real estate. Are you trying to shame people so they stop telling the truth, sorry not going to work. What kind of assho le would poke fun of people for not being able to afford a home with these prices? Well we all know what kind of person you are

  • Reply
    ayyyLmao 3 months ago

    The benchmark price is the listing price, the “ESTIMATED” value that the homeowner and agent think the house should sell for, it is NOT based on any actual transactions taking place. Agents and sellers must also believe fairies, unicorns and happy endings, cause they are not factoring in the current environment.
    Unfortunately there is no happy ending in this story if you are heavily indebted. Unemployment skyrocketing, stock markets crushed, forced shut downs, virus here to stay so people naturally will curb spending habits negatively affecting more businesses, get ready for meat prices and other food prices to spike . Oil industry down, our natural resource industry down, with realestate sales crushed thats a lot of realtors not getting a commission check, real estate lawyers, inspectors, mortgage brokers not making any money, air BNB investors with multiple properties holding the bag. Interest rates already at low levels with not much room to go any lower, instead count on banks to increase rates because of the risks on loan defaults, plus increasing lending standards making it higher to get loans.
    There will be a housing crash, how much, who knows but at very min i imagine you see 25% drop.
    AyyyLmao

    • Reply
      Mortgage Guy 3 months ago

      Incorrect. The benchmark price is the sold price, adjusted for quantitative and qualitative measures.

      Please stop misinforming people. We’re all a little dumber having read your comment, even if we know it’s incorrect.

      • Reply
        AyyyLmao 3 months ago

        I stand corrected, thank you.
        But i still stand by everything else i said

    • Reply
      Reality check 3 months ago

      Good analysis, don’t listen to that mortgage idiot. Most people who work in real estate are ill educated and wrong most of the time.

      • Reply
        AyyyLmao 3 months ago

        Thank you Reality Check,
        he was right about the Benchmark though, I took someone at their word for explaining it to me, only to realize they were wrong after Mortgage Guy brought it up.
        Should be interesting to see everything unfold though, there wont be a V shaped recovery, and unemployment is going to remain elevated. Those unemployment numbers also don’t include a lot of independent contract workers who are out of a job.
        Once the mortgage deferrals expire, and unemployment remains high, i think you’ll see car companies taking it on the chin the hardest at first as people try to cut their expenses, then homes follow.

  • Reply
    James Space 3 months ago

    It was very predictable, but we didn’t see it coming so fast…The whole world was closed up in a matter of days. The biggest problem is that the vast majority of the real estate goes to commercial lease and after the massive shutdowns the biggest part of the loss in our sphere comes from this sector…

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