Toronto Real Estate Sales Were The Second Lowest Since Great Recession

Toronto real estate buyers demonstrated they are still exuberant, but there’s a lot less of them. Toronto Real Estate Board (TREB) numbers show prices climbed in December, but are off peaks. The month also came in at a multi-year for inventory, and the second fewest sales in 11 years. That sales number is likely to be revised to the lowest, but that’s for later. On to the prices.

Toronto Real Estate Prices Off All-Time Highs

The price of a typical home across Greater Toronto is down from peak, but higher year-over-year. TREB reported a benchmark price of $761,800 in January, up 2.7% from last year. The City of Toronto reached $840,100, up 5.76% from last year. The vast majority of the gains are attributed to the condo apartment segment.

Greater Toronto Benchmark Price

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

Source: TREB. Better Dwelling.

The annual pace of growth is tapering across all regions, and numbers are still down from their peak. TREB’s annual pace of growth at 2.7% is down from the month before, and almost half what it was last year. Ditto with the City’s numbers. TREB’s prices are also down 6.68% from the peak reached in May 2017. The City is just $100 below the peak reached on June 2018.

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 home across Greater Toronto made improvements. TREB reported $650,000 in January, up 4% from last year. The City of Toronto reached $647,000, up 10.03% from last year. Once again, the rise here is largely due to a rise in condo apartments in the City.

The average sale price made much more conservative gains. TREB reported an average sale price of $748,328 in January, up 1.56% from last year. The City of Toronto reached $777,674, up 1.44% from last year. For reference, both numbers grew at a pace lower than inflation, meaning a drop in real terms.

Greater Toronto Average Sale Price Change

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

Source: TREB. Better Dwelling.

Toronto Real Estate Sales Are The Second Lowest Since 2009

Toronto real estate sales came in weak, but higher than last year… kind of. TREB reported 4,009 sales for January, up 0.6% from last year. The City of Toronto represented 1,422 of those sales, down 5.76% from last year. The sales number is the second fewest for January, since the Great Recession kicked off in 2009.

Greater Toronto Sales To New Listings

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

Source: TREB. Better Dwelling.

Revisions to sales numbers are fairly routine, and last year’s January was no exception. If last year’s revision was excluded, sales would be down 0.24% across TREB, and down 6.26% in the City. This is a normal sized revision, that isn’t normally worth mentioning. However, if January 2019 gets a similar revision in a few months, it would be the worst January since 2009. We could be looking at the worst numbers in 11 years, but we won’t know until the dust from last month’s contracts settle.

Toronto Real Estate Inventory Rises

New listings of Toronto real estate picked up last month. TREB reported 9,456 new listings in January, up 10.14% from last year. The City of Toronto represented 3,144 of those new listings, up 13.25% from last year. The City’s inventory is rising faster than the burbs, but also represents only a third of listings.

The total number of listings for sale, a.k.a. active listings, reached a multi-year high for the month. There was 11,962 active listings in January, up 0.57% from last year. The City of Toronto represented 3,575 of those active listings, up 3.32% from last year. The number of listings for sale is the highest for a January since 2013.

Greater Toronto Active Listings

The number of listings available for sale in May 2018, across Greater Toronto.

Source: TREB. Better Dwelling.

The market is currently dealing with rising inventory, falling sales, and higher prices. The level of inventory for January is the highest we’ve seen in 7 years. Sales were the second lowest since the Great Recession, and likely to revise to the lowest. The buyers left are still paying higher prices though, showing a disconnect. It’s easy to see why the US Federal Reserve marks Canadians as exuberant, even after a market “cooling.”

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18 Comments

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  • Reply
    Yusef 5 years ago

    There is. I was wondering why sales numbers look worse than they did last year, but didn’t realize last year’s were revised. How often does this happen?

    • Reply
      Jason Chau 5 years ago

      Usually 20-30 sales. When prices really dropped and everyone thought it was the end of the Toronto real estate world for 5 minutes, they went up to 60. BD published a chart a little while back, I’ll try to find it later and link it up.

      • Reply
        Mortgage Guy 5 years ago

        This number sounds about right. It’s only 0.01% of total sales, but it’s enough to flip the perception of the month.

        In reality, it’s not a great month, regardless of whether you factor a coming revision. People are just getting used to the reduced volume.

    • Reply
      Mac 5 years ago

      Don’t forget that people using partial sales numbers likely weren’t trying to get the whole TREB market, just the City of Toronto. The City of Toronto dropped over 5%, which is significant.

      The benchmark is BS, until they define what mystery meats go into that hot dog. The median price is rising due to a rising price floor (a.k.a. people will pay more for a small house or condo), which is a lower income bad purchase issue.

      Luxury detached is showing really good deals. I’m torn if I should be buying now and getting my first pick, or wait until there’s more inventory on the market.

  • Reply
    Party On 5 years ago

    Wonder if they’ll mention this at the annual review today. 🧐

    Bahahah, as if.

  • Reply
    SUMSKILLZ 5 years ago

    If sales volume is down, inventory is up AND prices are up, does that mean we’re seeing echos from 2017? aka people bought in 2015, 2016 or 2017 but are only closing now? I’m not clear on when sales are registered in these stats. Is it when the contract is written, or when the property changes hands?

    My only other explanation for the contradiction is that to buy something, you generally need to overpay as sellers refuse to sell at lower prices. Basically a setting where FOMO is gone and everyone’s screaming F-U when expectations prove insulting.

  • Reply
    Gregory 5 years ago

    Wow ! nice price increase… in the City of Toronto

    “The City of Toronto Median price reached $647,000, up 10.03% from last year. Once again, the rise here is largely due to a rise in condo apartments in the City”

    why the “once again” comment? excluding condos when you talk real estate in Toronto would be silly… the entry level property has shifted to a condo.

    Sales and Starts are dominated by Condos now in Toronto.

    Which certainly was not the case in 2009

  • Reply
    Zenity 5 years ago

    sale numbers are down, inventory up, average sales price up. This means there are now less sales and those sales that went through will effect the average more. This is most likely due to sales of very high price units skewing the average. If you take out the outliers you will probably find a different story. This is classic statistic issue. The TREB either hired a really bad analyst or they are misprepsenting the numbers on purpose. They have every incentive to fudge these numbers. It takes 1-2 years to pop a bubble. Back in 2007 people are seeing the same numbers. Canada needs to be realistic and pop the bubble, even if average price drops 40% we are just back to 2016 numbers. The with two years of mortgage payment and it’s original lower purchase price even if the price goes back to 2016 numbers we will not see huge damage to banks.

    • Reply
      Joe 5 years ago

      True, the high price units does skew the average but I think the prices are up for condos mainly because entry level condos are still getting more expensive. New one bedroom condos asking for 500/600k and I wonder why people are willing to pay for this. But when you think about it, they feel like they don’t have a choice if they want to get into home ownership.

      Renting is an option but you have to deal with the inconvenience when the landlord decides to take back the unit for “personal use”. Then you are left with no choice but to move/search for another unit and that’s pretty painful if you have young children.

      For a 2 bedroom condo around 600k (not new condo), at 3.64% fixed 3 year term, you are paying about 3225 mortgage payment (I counted the entire cost assuming no down payment) of which ~1375 is principle and ~1850 is interest. Add property tax+condo fees (~$750) to the interest payment and the expense is around $2600 each month which is roughly the same as the rent you pay for a similar condo. So essentially, you are investing the principle portion of your payment into real estate. Whether this is a worthy investment is up for debate as good investors can probably get better returns but for the layman out there, it isn’t too bad I guess?

  • Reply
    Greg 5 years ago

    Yes only segment that saw an average price decrease was 416 Detached.

    Every other segment was up.
    Condos, Townhouses and Semi’s in both the 416 and 905.

    416

    Condos up 8.8%
    Town. up 12.3%
    Semis. up 6.1%

    905

    Condos up 8.2%
    Towns up 2.1%
    Semis up 1.8%
    Detached up 0.9%

    Buyers are smarter then you think. When detached prices got out of whack – they went in search of better value – and Condos had lagged Detached price increases for years prior to 2016

    But soon may start to go the other way.

    • Reply
      John 5 years ago

      “Buyers are smarter then you think. When detached prices got out of whack – they went in search of better value – and Condos had lagged Detached price increases for years prior to 2016”

      You say this as if you speak for the herd. Really, you have misplaced confidence in this statement.

      I say this because, you are claiming the price point on condo’s is ‘better value’. Unequivocally condos are not better value except for select few people. I would suggest people went in search of condo’s because it is the last thing they can afford, regardless of what they actually want.

      • Reply
        Paul Brown 5 years ago

        Real estate agents/people with the bulk of their net-worth in their primary residence always speak on behalf of all property owners, and they never buy at peak, it’s always a year-over-year sale.

        They also don’t seem to understand that their primary home is consumption, and almost always lags returns for US equities. Canadians are always primarily focused on paying for their home, instead of generating a stronger economy.

        The greatest scams Canadian banks ever pulled off was getting the government to remove all risk, and convincing people that can’t do math that “forced savings” are the best way to retire.

      • Reply
        Greg 5 years ago

        right you are !

        The masses kept driving north until they could find a house they could afford – then realized it was crazy to Commute that far. Got more sensible and realized condos were a bargain in 2016/2017.

        Too bad nobody was pounding the table to buy a new condo in early 2016. Missed out on 50% upside.

  • Reply
    Asterix1 5 years ago

    Can’t trust TREB!! Seasonally adjusted garbage…

    Benchmark is also a joke. What is the Avg/Med prices for Condos/single detached?

    The RE Cartel can scream all they want. Canadians are mostly dumb and broke. You can’t push more debt onto this group of pigeons!

    Economy is already going to take a massive hit (no disposable income to prop economy + RE % of economy heading south).

  • Reply
    Mark 5 years ago

    Why are my comments not being published?

  • Reply
    Mark 5 years ago

    I’m trying to post some relevant info Howe er I typed it all out before and it did not post. Please address this issue or let me know what the issue is and I can adddress it on my end

    • Reply
      Joe 5 years ago

      That happened to me too. I think sometimes there is an error when posting comments. Copy your comments first before hitting the post comment button. In case it doesn’t get posted, you can just paste and try again.

  • Reply
    NJ 5 years ago

    I guess REBGV’s monthly report is far better than TREB’s as it looks it reflects the present market conditions…on the other hand the actual GTA market seem to be following the GV market…but the numbers are being modified to look nice…Bring it on…Yet no one bothers to take it…

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