Toronto

Toronto Real Estates Has The Worst February Sales Since 2009

Toronto real estate sales were recession like in numbers, but prices climbed higher. Toronto Real Estate Board (TREB) numbers show last month’s sales were the fewest for a February in a decade. The decline in sales were accompanied with a mixed change in inventory, and a rise in prices.

Toronto Real Estate Prices Rise Over 2%

The price of a typical home in Toronto moved higher last month. TREB reported a benchmark of $767,800 in February, up 2.35% from last year. The City of Toronto benchmark reached $852,400, up 5.5% from last year. Not huge gains, but the numbers are moving higher on the benchmark.

Greater Toronto Benchmark Price

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

Source: TREB. Better Dwelling.

The growth rate for the annual pace of price gains continued to decelerate. The 2.35% observed across TREB is smaller than the 2.7% seen the month before. The City of Toronto also observed a similar point drop in growth. Prices across Greater Toronto are still down 5.95% below the peak reached on May 2017. Yes, that was almost two years ago.

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 Toronto real estate made much smaller gains. TREB had a median sale price of $674,900 in February, up 2.88% from last year. The City of Toronto made a larger gain to $677,000, up 4.15% from the year before. Medians are not adjusted for size, quality or season. The numbers are much more volatile, but more popular with international buyers.

The average sale price of Toronto real estate showed the smallest gain. TREB reported an average of $780,397 in February, up 1.6% from last year. In the City of Toronto it reached $840,211, up 4.18% from last year. The City’s increase was led almost exclusively by an increase in condo apartments.

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 Prints The Fewest February Sales Since 2009

Toronto real estate sales continued to slide lower. TREB reported 5,025 sales in February, down 2.38% from the year before. The City of Toronto represented 1,879 of those sales, down 6.28% from last year. That means sales in the city dropped at a faster pace than those in the suburbs. For context, this is the fewest sales in the month of February since 2009.

Greater Toronto Sales To New Listings

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

Source: TREB. Better Dwelling.

Toronto Real Estate Listings Fall In The Suburbs, Rise In The City

The number of new listings for homes fell compared to last year. TREB reported 9,828 new listings in February, down 6.15% from last year. The City of Toronto represented 3,301 of those new listings, down 1.9% from last year. The decline of new listings had a mixed impact on total market inventory, depending on the region.

The total inventory for sale fell across TREB, but increased in the city. TREB had 13,284 active listings in February, down 0.58% from last year. The City of Toronto represented 3,932 of those listings, up 3.14% from last year. Falling inventory in the suburbs, and rising inventory in the city.

Greater Toronto Active Listings

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

Source: TREB. Better Dwelling.

The importance of sales volume compared to inventory is worth a mention. The fewer sales, the less confirmation of a market’s acceptance of a price. That’s especially true if sales are falling much faster than inventory.

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30 Comments

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  • Reply
    Trevor 7 months ago

    It really is pretty crazy how low inventory was in late 2016/2017, when Toronto was going to run out of land and everyone was blaming foreign buyers.

    • Reply
      AT 7 months ago

      FOMO squeeze. Quick price increases on any asset result in existing owners to hold as long as they think it can rise. That’s why smart money sells at the first sign of weakness, because prices will keep rising, but it becomes harder to liquidate. If everyone could time the buy-hold-sell at high, everyone would be Warren Buffett.

      This is also why assets fall all at once. Once people realize the peak is long gone, they all come up with the genius idea to sell at the same time. In 2009, inventory doubled from the year before. I imagine there’s a pretty good chance we can see that this year.

      The benchmark is up 5%, but that’s clearly not the case for any house in down

      • Reply
        John 7 months ago

        To be fair, if everyone could time the buy-low sell-high with complete accuracy, there wouldn’t actually be any buy-low sell-high opportunities because there would be no losers. Food for thought.
        #Paradox.

  • Reply
    Jamie 7 months ago

    You’re not even going to mention how manipulated the data being reported elsewhere is getting?

    https://twitter.com/StephenPunwasi/status/1102916868833075205

    • Reply
      Jason Chau 7 months ago

      That’s next level screwed up. Seasonal adjustments should be higher than actual numbers, but they shouldn’t be so high that it gives a completely different y/y trend. Something funny going on with their seasonal adjustment models.

    • Reply
      Mark 7 months ago

      That’s because the treb as well as other real estate boards manipulate their data to show price increases year to year. They deliberately change their statistical formulas to show this without informing the public. It’s amazing how no one regulates these fraudulent numbers and they are able to get away with this

  • Reply
    Frank 7 months ago

    Sales are at recession levels, inventory is rising and will continue to rise into the Spring. Pesky investors and speculators are fueling the tiny price growth. Prices will fall eventually, it’s just a matter of when…

    • Reply
      Jason Chau 7 months ago

      This year’s going to be interesting if we’re already at a recession number of sales.

  • Reply
    P0rkchop 7 months ago

    Sales are down 150 from last year February but new listings are down by 692 as well and prices are up a couple percent. Am I missing something? I don’t see panic

    • Reply
      Mortgage Guy 7 months ago

      Last February was written off by buyers as a temporary downturn. “Recession level sales” without the recession is not a good thing. When the recession comes in 6 to 12 months, those levels are going to fall even lower.

      Regarding prices: Home prices are considered a non-productive investment, meaning it’s favored by dumb money. Dumb money isn’t an insult, it means money the participants are subject to information asymmetry. They don’t know what fair value is, which is why buying a condo in Toronto though an investment manager is almost 20% cheaper than buying it through a sales centre.

      Prices remain flat until a major event shifts their mindset to consider other facts. You know in movies where the character flashes back and sees all of the signs of the conclusion? When the recession hits, that’s what they’ll do. Only 1 in 10 homes are being sold? Mortgage rates are higher than price gains? Negative cap rates require earning more? Increased home prices are dragging spending, dragging economic growth? [Tim Hortons starts spinning]

  • Reply
    SUMSKILLZ 7 months ago

    My northern 905 neighbour grudgingly accepted a figure to avoid bankruptcy, 27% below peak 2017 prices, after 130+ DOM. Even though he bought the modest detached home in 2013, more $ went in than came out. Sure it’s just one comp., but it still freaks me out being a few doors down. Its not off in some far away place, its not in some rural hamlet either. Its walking distance to a Go Train station.

    • Reply
      Craus 7 months ago

      Yeah – I know it’s anecdotal, but what I’m seeing and hearing is way worse than what’s reflected in these stats. Is it that only condos were selling a year ago, and now there are more detached homes?
      Two people I know who sold late last year were close to 20% below peak (Markham and Oakville), and one who sold in January (North York) was close to 25% below peak.
      Meanwhile, the most successful real estate agent I know sold 2 of his 4 houses in late 2017 (Clearly didn’t drink any of his own Kool Aid as he was pushing me hard to buy in April 2017), and now spends most of his time on vacation either in nicer climates or cities that he really believes are world class.

  • Reply
    SCE 7 months ago

    Womp wompppppp. Prices keep going up I see. They say it has to crash eh.

    • Reply
      Mathmagician 7 months ago

      Prices went up, but remember it’s the same seasonal adjustment model that turned negative sales into positive. Any seasonal adjustment model that changes the direction of the trend most certainly means you’ve introduced too much of a positive statistical bias. The result is usually a lag or “sudden” change.

      The US had the same problem with GDP and production numbers. Of course, this is beyond the scope of what the average investor would understand. Instead, you’ll just see a positive move, feel good, brag to your friends, and then don’t want to talk about real estate to your friends when the sudden drop materializes.

    • Reply
      kwo 7 months ago

      An increase of less than the rate of inflation is not an increase. It’s the opposite.

    • Reply
      someguy 7 months ago

      Good to see you SCE. Stick around — the fun’s just getting started.

  • Reply
    Ya Lan 7 months ago

    Reminder for the kids that wealthier homeowners are starting to fall behind on their payments. I’m sure you’ll be fine working two jobs for that condo though.

    https://betterdwelling.com/toronto-and-vancouver-real-estate-see-mortgage-delinquencies-start-to-climb/

  • Reply
    Quan 7 months ago

    Boom, done. Price gains are below the cost of financing. Only investors that can’t do math would find that an attractive market.

  • Reply
    May Benot 7 months ago

    Just another faux newspaper twisting each article to support prior beliefs of its readers.

    Regardless of where the market is going, the length this rag goes to to contort and pull out evidence of ‘proof of a sky is falling’ is laughable.

    I use this in my stats class as educational material.

    • Reply
      Mac 7 months ago

      Can’t imagine how bad your stats class being taught would have to be for you to think there’s “twisting” when there isn’t one definitive or forward statement in the whole article.

      Let me guess, you teach at diploma mill like UBC? Or you’re a high school teacher that makes $50k a year, but thinks they really understand how financial markets work, you just don’t apply it to any of your own life, because making a subpar wage and pretending you could do better is much easier than actually having to make productive investments?

      • Reply
        Flint 7 months ago

        Sounds more like a solid B- student to me. Bright future as a realtor!

      • Reply
        crose 7 months ago

        The only teachers that make 50k a year are first year teachers …98k plus for a 12yr teacher.
        Please don’t insult our teachers.

        • Reply
          PO 7 months ago

          Public teachers are making just shy of six figures? I have zero sympathy for public education cuts now. 3 months off, they have a guaranteed job for life, AND they each make more than a typical household? Ridiculous.

          There’s something truly absurd about the way Canadians treat money. They inflate pay, without understanding the consequences to broader society that it inflates the cost of everything as well.

        • Reply
          Carlton 7 months ago

          And teachers are complaining about salaries!

          With all the sick days, pd days and 3 months vacation plus a fantastic pension why the hell are teachers complaining?

          Do they even retire?

          • Chris D 7 months ago

            If you can’t see the value of teachers within a society, then I’m not sure what kind of society you would care to live in.

          • crose 7 months ago

            I think we all value teachers but they don’t appreciate the gains ( highest paid in North America) teacher have made over the last 40 yrs by holding our kids for ransom(strikes and work to rule) and for what…some of the lowest math scores in the country.

      • Reply
        Big Joe 7 months ago

        Oh I really wish there was a like button. I’d like the $h!t out of this comment.

    • Reply
      Joseph 7 months ago

      May, you say you use this in your stats class as educational material; I’m interested in hearing what the “this” is in your comment.

    • Reply
      kwo 7 months ago

      Yes, my spirit animal is also the ostrich, with it’s head in the sand.

      I also like math. Like the time I took the average price in the GTA ($780K) vs the average household income in the GTA (~$80K) and divided them. Almost 10X difference. Then I added in the stress test, which cuts out the banks in the majority of cases. So the only ones who can fund those mortgages are the high interest subprime lenders. Yes, yes, that worked out wonderfully for the Americans. Sales are stalled, Canadians are leading the globe in terms of levels of debt, subprime lending also at record levels and folks at the bank of canada are way scared to raise interest rates. No, nothing wrong here at all, everything is wonderful. I am one with the sand.

  • Reply
    Beh G. 7 months ago

    There was an interesting and unexpectedly large bump in average detached prices in the 416 in February. I was expecting a bump from January based on December’s S/NL/AL ratio but certainly nothing close to 10%!

    That was the largest monthly price increase since September 2017. I haven’t had time to go through the data in detail so does anyone know what made this February so special? It certainly wasn’t the weather and the ratio of detached sales to condos was actually slightly higher in February 2018, so I’m at a loss to explain the huge price bump.

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