Toronto

Toronto Real Estate Sees A Record 25,837 New Listings In May

Toronto real estate sellers set a record for new listings, while sales slipped and prices got a little softer.

Toronto Real Estate Sees A Record 25,837 New Listings In May

Toronto is having a much cooler spring this year, and it has nothing to do with the weather. The Toronto Real Estate Board’s (TREB) latest release shows buyer demand is nowhere near last year’s levels. Generally speaking, the market saw much more conservative price movements, listings skyrocket, and sales decline.

Toronto Prices Increased 29%

Toronto real estate prices were a little softer than we’ve seen, but still made solid increases. The composite benchmark price is $821,400, a 29% increase from the same month last year. For those that don’t know, a benchmark price is the price of a “typical” home, adjusted to remove luxury pricing bias.

Source: TREB.

The average price of a home showed slower growth compared to last year. May saw an average price of $836,910, a 6.09% decline from the month prior. This is still a 14.9% increase from the same time last year, so prices are still booming – just not as much. This number can be confusing, especially when looked at month-over-month.

Averages are well…averages. A higher volume of lower priced units (like condos) can skew the number lower, which is why it’s best to compare them to the same month. When looking at averages over a period of time, month-over-month declines are actually normal. Now I’m not saying that prices are great, everyone should jump in. However, don’t read too much into a month-over-month price decline, because they happen. This was a steep average decline though, so it’s worth noting nonetheless.

To give some context to annual growth numbers, look at other markets. San Francisco is a “hot” global market, where average prices “only” appreciated ~4% from the same time last year.

Inventory Is Soaring

The number of listings hit a new record across TREB. May saw 25,863 new listings, a 48.38% increase from the same time last year. The month also ended with a 2 year record for active listings, 18,477. This represents a 42% increase from the same time last year, although the number doesn’t mean much. Active listings notably increased after we called out agents on attempting to manipulate the number by cancelling and relisting after the counts were done.

Source: TREB.

Sales Are Declining

Sales across the GTA are showing substantial declines. TREB reported 10,196 sales last month, a decline of 20.3% from the same time last year. In the 416, there was a slightly lower 3,926 sales, a 15% decline during the same period. That might seem like a negative thing, but as prices climb more people will be priced out. By itself, it’s not that concerning of an issue. The declining sales coupled with an increase in inventory could lead to softer pricing in the future however.

Toronto real estate isn’t experiencing the same booming market conditions it did just a few months ago, but it’s not exactly Detroit either. A declining average price might indicate a preference for lower priced units. It could also indicate less luxury inventory – which was bought at an unusually fast rate just the month before.

The increase in inventory and a decline of sales are the more concerning trend to keep an eye on. If this imbalance of inventory to sales continues for a prolonged period, the market may be in for a bumpy ride.

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14 Comments

  • Reply
    Cjay 4 months ago

    “prices are still booming – just not as much”

    Really?

    • Reply
      Jim Shady 4 months ago

      People are paying more than 14% for a home they bought last year. That’s $140k more than last year for a detached house. Anyone that doesn’t think that’s booming, likely doesn’t have any idea how investments work.

  • Reply
    Bob 4 months ago

    Your posts have become a waste of time. Your arguments are contradictory. This is the last time I read this drivel.

    • Reply
      Cathy 4 months ago

      Markets don’t move in a straight line pea brain. Instead of wasting your time critiquing everyone that doesn’t give you hope of owning a home one day, why don’t you go back to school to be trained for a better paying career. Even a proper correction means most of you angry internet trolls won’t be able to afford a home in Toronto. Get over it.

      • Reply
        Daniel 4 months ago

        @Cathy Every angry troll that’s unsatisfied with their lives feels the need to tear down people on the internet.

        This is actually the smartest interpretation of the stats I’ve seen. The author gave a clear separation of the numbers and the stats. She didn’t come up with a ridiculous guess as to why the numbers are doing it.

  • Reply
    Jon 4 months ago

    Noticed CBC & Torstar publications were saying the record new listings were a sign of a hot market. Also, way too much blame on Ontario’s new real estate rules. We all know the market turned before those rules were even imposed when many Torontonians agreed with international (not Canadian) media that it was a bubble. Then Home Capital went down. CMHC applications down 40%! In fact, do a survey and I bet 90% don’t know about the new real estate rules outside the foreign buyer tax and rent rules – which doesn’t impact your average domestic buyer.

    In 2000 to 2008 mortgage credit as a percent of disposable income exploded. Then it went more sideways, growing at a slower pace post 2009. My bet is that many mortgages are untracked, backed by foreign companies or sourced indirectly from alternative sources. The central banks printed trillions of dollars and of course that is going to end up in assets – at first. Eventually it will flow into incomes because that is the only real economy. People can only pretend that these assets are worth what they are worth for so much longer.

    • Reply
      Daniel 4 months ago

      Agreed. Same thing happened inVancouver, they added a foreign buyer tax to declining demand and pretended they solved it. No, it can’t support that many sales at that number for long.

      Low interest rates are designed to make people feel like they make more, this is an intended side effect to stimulate spending.

      • Reply
        Neo 4 months ago

        Low interest rates actually makes assets less valuable because more people can afford the same asset through debt not income growth. If a million dollar house was based on someone’s income very few people would be able to afford it. In actuality low interest rates encourage a reduction in the purchasing power of an individual’s income, hence inflation and the cost of living goes up while your standard of living goes down.

  • Reply
    Bosco 4 months ago

    One of your better articles. A very nice balanced presentation of data. Thank you, great work!

  • Reply
    Gregory 4 months ago

    the “click bait” headlines continue… love it.

  • Reply
    Hamish 4 months ago

    One valuable takeaway from this article is it shows how the large number of domestic speculators that seem to be most of the fuel for the rising prices can afford to buy/speculate even with prices so high. Like the article says, it doesn’t mean that it’s going to turn out to be a good investment (just because you can doesn’t mean you should), and most analysis on this site suggest it won’t end well, but this analysis is a valuable contribution for explaining how there can be so many domestic speculators fueling the market even at million dollar prices. And that’s without even considering the access to equity many of these domestic speculators have because, given their income, they probably already own a home that has appreciated significantly.

  • Reply
    Hamish 4 months ago

    Whoops, commented on wrong article, apologies.

  • Reply
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