Toronto

Typical Toronto Detached Home Is Down Over $105,000 From Last Year

Toronto detached real estate is seeing prices move seasonally higher, but is still way below last year’s levels. Toronto Real Estate Board (TREB) numbers show lower detached prices in May, but the declines are tapering in size. Not entirely unexpected with declining detached sales, and rising inventory across Greater Toronto.

Toronto Detached Homes Are Down Over 8%

The typical detached home made a slight uptick, but still remained well below last year’s levels. TREB reported a benchmark price of $934,100, a 10.19% decline year over year. The City of Toronto saw the benchmark rise to $970,800, an 8.6% decline year over year. Prices are down, but the size of the decline made its first taper.

Toronto Detached Benchmark Price

The price of a typical detached home across the Toronto Real Estate Board, in Canadian dollars.

Source: TREB, Better Dwelling.

The benchmark price of a detached is making smaller declines than the month before. TREB’s 10.19% decline in May is slightly higher than the 10.34% decline observed the month before. City of Toronto’s detached benchmark is 8.6% lower in May, below the 9.55% drop observed the month before. A negative number is still a negative number, but a buyer last April has lost less money than the month before. That’s something.

Toronto Detached Benchmark Percent Change

The 12 month percent change of a typical detached home across the Toronto Real Estate Board.

Source: TREB, Better Dwelling.

Median Prices Drop In The Suburbs, Rise In The City

Benchmark prices are slow moving and opaque, so let’s look at the median price. TREB reported a median sale price of $875,000 in May, a 5.40% decline compared to last year. The City of Toronto had a median sale price of $1,158,750, a 3.45% increase compared to last year. These numbers echo the sentiment that things are worse in the suburbs than the city.

Toronto Detached Average Sale Price

The average sale price of a detached house in the Toronto Real Estate Board.

Source: TREB, Better Dwelling.

Average Sale Price Drops Over 8%

The average sale prices is down across the board for Toronto detached units. TREB reported an average sale price of $1,045,553, an 8.2% decline compared to last year. The City of Toronto had an average of $1,426,094, a decline of 5.6% year over year. The suburbs had $929,401, a 9.0% decline from last year. Remember, an average sale price isn’t very helpful for determining how much a home costs. Instead, it should be used as a direction of upgrade flow and dollar volume.

Toronto Detached Average Sale Price Change

The 12 month percent change of average sale price across across TREB.

Source: TREB, Better Dwelling.

Detached Sales Drop Almost 30%

Detached sales numbers are still well below last year. TREB reported 3,344 detached sales in May, a 29.7% decline year over year. The City of Toronto represented 782 of those sales, a decline of 31.76% year over year. Detached sales are falling across TREB, but the decline is slightly higher in the city.

Toronto Detached Sales Vs. New Listings

The total number of detached sales, compared to the number of new detached listings per month.

Source: TREB, Better Dwelling.

Detached Inventory Rises Over 17%

New inventory was more scarce across Toronto. TREB reported 10,208 new detached listings in May, a 27.27% decline compared to last year. The City of Toronto represented 2,196 of those listings, a decline of 29.68% from last year. New listings were highly gamed over the past few years, so the decline isn’t all that useful of a measurement.

Toronto Active Listings

The total number of detached listings available.

Source: TREB, Better Dwelling.

Active detached listings, the total number of listings for sale, were higher than last year. TREB recorded 12,505 active detached listings in May, a 17.37% increase from last year. The City of Toronto represented 2,306 of those listings, a 2.85% increase. The building of detached inventory has to do with the declining sales in both regions.

Detached prices made a seasonal increase, but the benchmark is still down ~$115,000 across TREB. The fact that declines became smaller for a single month is encouraging, but just like one month down wasn’t a trend, neither is a month higher. As stated last week, it’s unclear if prices are finding a support level or if this is a reaction rally. Considering sales are continuing lower and inventory is moving higher, the support angle is a tough sell.

Like this post? Like us on Facebook for the next one in your feed.

31 Comments

  • Reply
    Bring It On 2 weeks ago

    Love hearing agents say the best time to buy is last year, and the second best time is now. Well, last year you would have lost most of that downpayment. This year? Who the f**k knows, but you were wrong about last year.

    • Reply
      Bluetheimpala 2 weeks ago

      Fundamentals aren’t changed by the media or agents or how the wind blows. They were naive/stupid/lying but it doesn’t change the facts only prolong the inevitable. Water is wet. Sky is blue. Dog tongues are sqeeeshy. Extended periods of cheap money always lead to unsustainable asset appreciation; I don’t believe there has been a time in history when this has not happened and you tack economic stability and a FOMO culture and that is a ticking timebomb. BOOM! BD4L.

    • Reply
      SCE 2 weeks ago

      What about when agents have been saying it was a good time to buy since 2009? Love how all the “told you so” real estate bears come out of the woodwork when prices finally retreat.

      • Reply
        Beh G. 2 weeks ago

        Well, that’s just the point… prices were never going to retreat according to the RE industry because Canada is the most desired country, so much immigration, yada yada yada.

        In reality 2009 (after the minor adjustment) was still a very good time to buy and inflation adjusted prices were still close to the levels they were before the late 80’s crash.

        By 2014, it was pretty obvious a speculative bubble was forming with all the irrational behavior and exuberance, If you purchased a home then and were still paying less than you would for rent and you were planning to live there for the long term it was still a semi-rational decision.

        But if you jumped on the speculative bandwagon since then, it was always going to be a pretty bad decision. The only reason prices didn’t crash soon after was that the BoC dropped the rates to help Alberta and the Canadian dollar tanked but the crash was unavoidable and surely you must see that at least in hindsight.

  • Reply
    Bluetheimpala 2 weeks ago

    Tick tock. Can’t stop won’t stop. BD4L.

  • Reply
    Mica 2 weeks ago

    What’s a reaction rally?

    • Reply
      Grizzly Gus 2 weeks ago

      Bull trap

    • Reply
      Bluetheimpala 2 weeks ago

      A reaction rally is what I call ‘the pop’. Historically as prices start their decent, there is a meaningful psychological level, say down $100K YoY in detached, that spurs on additional ‘dumb money’ piling in. It can last for a few months which then gets more money in and then fundamentals (standing in the back looking all wasted) pushes his way to the front of the crowd with his dick hanging out of his pants and dart in his mouth rambling about how “You’re all f-ed!”…he is led out of the building and as it burns down is making snow angles with the ashes of the overleverages souls. We saw this happen late last year but it was still some bad money trying to get a slice before all the regulation and financial oversight was put in place…I would argue this could be the pop but only time will tell.

      • Reply
        Tim2 2 weeks ago

        Irrational Exuberance =) every bubble has had one and 2017 was it for RE.

  • Reply
    Michael 2 weeks ago

    Hey I’m not a finance guy what conditions need to be met in order for the more educated here to feel that the market has found a new support level ?

    • Reply
      Jason Voorhees 2 weeks ago

      this is the wrong website to get financial advice. you want to take advice from a bunch of renters – this is the site.

      • Reply
        Mark 2 weeks ago

        Parents stopped charging you rent Jason?

      • Reply
        SCE 2 weeks ago

        These people probably can’t even afford to rent!

      • Reply
        Clown Patrol 2 weeks ago

        Love this clown that comments every week on how much he hates this site. Two bank CEOs are *now* renters after selling, and were warning about buying at these levels last year… but your shitty realty degree forces you to hate renters. I’m sure being a Realtor or dinosaur that bought 50 years ago with no idea what the cost basis for your home is, knows more than the bank executives that sold and started renting while warning.

        Enlighten us, oh great troll that has so much time, they devote to reading and trolling in the comments every week? What is the genius advice your old ass has for the rest of us? Especially me, that works in finance, analyzing billions worth of equity. I need to know!

        Buy now? It’s a buy, right?

        • Reply
          SCE 2 weeks ago

          Ha! Equity analyst, how’s your alpha vs the index? There are tonnes of analysts who get it wrong. In fact, on average most do. If you are one of the few that don’t, then kudos to you.

          I also work in capital markets and I’ve seen a lot of ppl talk the talk but end up being wrong. Herd mentality, what a joke.

          • Ian 2 weeks ago

            You sound like a shitty analyst if you’re questioning someone that essentially said it’s not always the right time to rent.

        • Reply
          Beh G. 2 weeks ago

          The Globe and Mail and maybe even BD were reporting back in 2016 that the bank executives had been offloading their properties and by October the big banks had changed their tune and were asking the government to take concrete steps to cool down the housing market.

          The signs were all there and it’s out of pure ignorance that some people still refuse to accept reality even with hindsight.

    • Reply
      @xelan_gta 2 weeks ago

      Watch inventories (or better Active Inventory/sales). If inventories stopped growing or even started declining that means new speculation wave may be coming into the market which can push prices higher.
      If inventories are growing no matter what happens to the prices, they can even go up it doesn’t matter, at certain level of inventory they will collapse. It can also happen sooner like it did last year.

      Since last year inventories are steadily growing both in GTA and GV so we are on a course to a Canada-wide RE crash so far.
      (This is just my opinion)

    • Reply
      Bluetheimpala 2 weeks ago

      Nice troll…what is a ‘support level’ as I’m not a finance guy like you?…lexicon speak volumes my friend as well as your placating…BD crunched this a few months back and others have broken it down further, I definitely was not one of them as I’m not a stats guy in general. Go do some digging muffin. BD4L.

    • Reply
      Grizzly Gus 2 weeks ago

      RE prices are a function of what someone is willing to spend but also and more importantly, what they are willing and able to borrow. My bearish view is based on my belief that their is way too much bad debt in the system, and that even flat prices for an extended period will cause a recession due to how much of our economic activity is tied to home sales and future RE investment.

      For me to feel we have hit a new support level, I would like to see something that implies debt levels are not out of control, and that any RE lead recession or recession in general would not break homeowners. For this to happen I would like to see interest rates 100bps or so higher (this will press existing debt levels and allow us to truly know who can afford their shit), followed by a period of stable sales under the B20 regime. This will force out the bad debt holders who would be replaced/ sell to new buyers who are more financially sound (As the new buyers would have to pass the stress test). If this process can be carried out without huge increases to active listings, large price declines, and/or us entering a nasty recession, then I will start to believe in price support.

      I think by late fall/ early winter we will have a much better read on the situation. Sales volumes have been down for quite sometime which should start to put pressure on RE agents and others that are tied to volume. Tons of mortgage renewals this year where those renewing will be doing so at a higher rate for the first time in a decade.

      • Reply
        Grizzly Gus 2 weeks ago

        Plus we should have another hike in July and probably another one before the year is out.

        • Reply
          W 2 weeks ago

          Though we are due for rate hikes, latest political developments from Trump might put a wrench on hikes. Easy for Poloz to say ‘uncertainty’and hence no hikes as he has done in the near past.

      • Reply
        SCE 2 weeks ago

        Do you realize that the people who need to renew likely bought their homes 5 years ago? Do you know where prices were back then? Their mortgages are probably so low that any hike won’t make much of a diff.

        I agree with you that higher rates will have an impact when mortgages renew but that’s in 4 to 5 years. Do you have interest rate projections for that time? If you do, please share! Would love to know how you get to those figures.

        • Reply
          CBo 2 weeks ago

          I posted this several weeks ago, but worth pointing out that many of these renewals are being offered very low variable rates, where the payment will never increase, even with rates increasing in the future. Instead, the amortization is extended several months for every bump in basis points.
          The argument that 47% of mortgages will renew this year at higher rates is a half truth. 47% of mortgages are set for renewal. Who knows how many are actually seeing their payments lowered this year as opposed to the fear mongering narrative being pushed as of late.

          • Ian 2 weeks ago

            You must be a mortgage broker, because you’re missing the point. The “half-truth” is one of the financial risks the BoC spoke of, mortgage brokers are just spreading FUD around the issue.

            Yes, some people will renew at a lower rate, and most are variable. Most of those are variables, meaning they will pay a higher mortgage rate. The issue with lengthening amortization is this removes more cash from the economy, for a longer time. This has long-term implications for the economy, which also diminish the value of the asset. That’s why it’s an issue, and it’s the same issue the US was hit with in 2008.

            People think it had to do with a bunch of poor people defaulting, but it wasn’t. Most defaults were from prime credit holders, that just wanted to end ownership of a shitty, depreciating asset.

  • Reply
    Mark Baum 2 weeks ago

    I posted this a bit late yesterday so may not have gotten many eyeballs on the question. Was wondering your thoughts on this BD commenters:

    -TD and BMO less real estare heavy, stocks near all time highs

    -CIBC, RBC, Scotiabank more real estate heavy, mixed stock performance & BNS at one year low

    • Reply
      @xelan_gta 2 weeks ago

      I can’t comment on individual stocks but TSX in general is at Aug 2014 level right now.
      Investors have doubts about Canadian economy and RE markets in particular and stock market reflects that.

  • Reply
    Beh G. 2 weeks ago

    If you look closely at the data from TREB, May had an unusually high number of home sales in the upper end of the market which pushed the average prices up. 27% of all YTD sales for homes above $2M and 30% of all YTD sales for homes between $1.75M and $2M were completed in May.

    But this has been the trend for many years in GTA where average sales prices in May have been typically 10% higher than those in January. This is the whole seasonality of the RE market in the GTA: prices reach their peak in May, drop through the summer, have an uptick in the fall and then drop again until January.

    So, seasonally adjusted average prices in May, even for detached homes in Toronto were not any higher than they were in April or January although they are clearly above the trough of last August. It will be interesting to see what happens between now and September… if we hit new lows or the market has found a support level with the current financial or economic conditions.

    Of course, none of the economic conditions are improving and interest rates are expected to rise, so lots of headwinds and very few positives going forward.

  • Reply
    Joe 2 days ago

    Notice the report says GTA not Toronto? The prices in E01/E02/E03/W01/W02 are still holding up so well! Look at recent sales in these regions and their sold prices are shocking…can’t speak for other regions but at least in these regions where I’m looking, it’s still very strong.

    True, sales volume isn’t as much and inventory is at record high but prices are not dropping!

Leave a Reply

Your email address will not be published. Required fields are marked *