Toronto real estate continues to defy all odds, but this time it’s to the downside. Toronto Regional Real Estate Board (TRREB) data shows prices fell further in January, extending a crash that now rivals the largest in the country’s history. Sales are still weak, as the investor-dominated market remains out of reach for end-users. The combination helped inventory reach a high for the month, with an epic inflow of supply still in the pipeline for this year.
Toronto Real Estate Price Crash Approaching The Largest In History
The benchmark price of a typical home across Greater Toronto.
Source: CREA; TRREB; Better Dwelling
The price of a typical home across Greater Toronto dropped 0.7% (-$6.2k) to $936,100 in January, 8.0% (-$81.0k) lower than this time last year. Prices haven’t posted annual growth in nearly two years, and now sit at roughly the same level they did in 2021—marking a half-decade of zero progress.
Peak buyers wish they were that lucky. The composite benchmark has cratered 27.0% (-$345.8k) since the February 2022 peak, though still 17.0% (+$135.8k) above 2020 levels. This highlights just how fast prices climbed: After a correction that’s less than a point from being the largest in Canadian history, home prices still beat inflation.
At this level, they’re still out of reach for end-user budgets—a problem that’s showing up in demand. The lack of demand, that is.
Toronto Home Sales Fall, Inventory Hits A New High
Greater Toronto existing home sales vs new listings: January.
Source: CREA; TRREB; Better Dwelling.
Existing-home sales remain at one of the weakest levels in Toronto’s history. TRREB data shows sales came in 19.3% lower than last year, with just 3.1k units sold in January. Not quite as bad as new condo sales, but it was still the worst volume for the month since 2009. The population in Greater Toronto grew 30% (+1.7 million people), but existing homes remain at the same level. Ouch.
January isn’t typically busy, but sellers appear to be facing a sense of urgency. New listings were 13.3% lower than last year at 10.8k homes in January, but still the third-most for the month. At more than 3x the volume of sales, the sales-to-new listings ratio (SNLR) was only ~29%. At this level, the market is firmly in a buyer’s market, where prices typically fall.
The supply-demand mismatch is helping inventory make an aggressive climb. Last month ended with 18,900 active listings, up 8.% from last year, setting a new January record.
Toronto real estate made a dramatic shift. Just a few years ago, investors sent the market soaring, pricing end users out. Now that investors are facing losses, demand has completely disappeared.
Investors are hesitant to catch a falling knife, and end-users are still priced out of the market. With a wave of incoming inventory, the odds look stacked in favour of a weaker demand balance before it improves.
I hope no one is under the impression a 27% drawdown just bounces back in a few months.
Following a bubble, there’s two problems:
– land is now inefficient, forcing jobs to migrate.
– low rates and end users who stretched their budgets are pulled forward demand
Even after prices correct (they look like they have some room to fall further from here), you then need to wait for the excess demand to catch up to the normal levels. There’s an estimate that Punwasi wrote that estimates pull forward, and it was something like 5 years of buying occurred over a short-period.
There’s a good 10-15 year window before things pick up. At least in the meantime actual home buyers are going to be the ones shopping in a few months.
How much is the market down from the peak when inflation is factored in, there was a lot of inflation over those years.
If the bikelanes didn’t fix it, staggering slow moving trash vehicles throughout rush hour is sure to revive demand for toronto.
Well well well. If it isn’t the consequences of our actions. The FO part that comes after a lot of FA.
Guess those prices aren’t supported by market fundamentals after all and that recession we aren’t having is not not having an impact. Suppose that inflation is also 2%.
This is just the boards trying to get buyers. Prices have barely budged if you look at Realtor.ca.
The Government won’t let home prices fall, as it’s their golden goose. High home prices justify everything from bank leverage to property taxes.
It was Japans golden goose and it took 30 years for it’s real estate market to recover.
No minds in Canada pay too much!
Buyers for new properties have disappeared. Hence no sales.
Buyers for resale properties according to stats are also vanishing rather quickly.
To sell in the current market sellers will need to accept a vastly lower price than even a few months ago. At the moment there is no bottom in sight. Recovery might be years away for detached properties. For condos due to increasing fees and charges, there might never be a recovery.
It’s the flipside of a boom. Real estate is going to get very ugly from here. That backfire you are hearing comes from real estate agents who told you prices never go down.
Based ! There’s a lot of coping at the moment from those real estate agents. You gotta love it.
Wow, looks like my investment property in Toronto might finally be affordable again! The market crash could mean a great opportunity for buyers like me.
I can’t believe the economy is still in such a state. I was hoping for a more stable retirement, but it seems like the real estate market in Toronto is only adding to my worries.
The Toronto real estate market is definitely shifting, and it’s going to be interesting to see how things play out. With the inventory increasing, it might be a great time for sellers – but buyers may struggle.
What did you just say, an increase in inventory is a good thing for… sellers ???
You need to clarify when you say investors are facing loses as that’s not completely true, it’s only the over leveraged investors who are facing losses and negative cash flows. Investors like myself who are not leveraged are taking advantage of this market. I’ve bought 3 condos in the last 2 years and actively looking for more something I would have never been able to do in the last several years.
If 70% of investors since 2020 are facing losses, it’s not the exception—it’s the rule. Investors making money technically need to specify they’re the exception in this context.
It’s also not BD making the statement regarding losses, but CIBC economists who provided that data point for the market. A point they’ve reiterated annually since 2022.
A capital loss is a loss, whether you choose to mark it or not.
you are correct the investors currently making money (Apx 30%) are the exception I never argued that, my point however is that those losing money is strictly due to being over leveraged and greedy. Putting 80% mortgages with record low interest rates on over priced inflated undesirable condos thinking the market had no upwards limits and wouldn’t correct at some point is not an investor that’s called an opportunist.
The current rent for a 1 bed plus is currently $2300 -$2500, with condo fees, taxes and insurance expenses would be around $1000 per month, I think most people would agree that’s pretty good cash flow, however add a $3500 mortgage payment and it doesn’t take a rocket scientist to see why that 70% you refer to are in such a dire situation, while the none leveraged investor is doing just fine.
Anyone investing in Canadian real estate needs their heads examined. Is there a brain there?
There are over 143 million USA homes in all price ranges and styles across the USA – MILLIONS OF WHICH COST LESS THAN 50K
ENJOY POVERY AS YOUR CONDO BECOMES ALMOST WORTHLESS ACROSS CANADA
WORLD INVESTORS HAVE DUMPED CANADA AND LEFT FOR THEUSA BAGHOLDERS
You are really spamming aren’t you?