Greater Toronto real estate just had its slowest start to the Spring market in more than a decade. Toronto Regional Real Estate Board (TRREB) data shows the typical home (composite benchmark) saw prices fall further in March. Last month saw a sharp decline in home sales, printing the weakest demand for the month in well-over a decade. At the same time sellers appeared in one of the highest volumes in years, helping to apply further downward pressure on prices.
Toronto Real Estate Prices Made A Sharp Downtick Last Month
The benchmark price of a typical home across Greater Toronto.
Source: CREA; TRREB; Better Dwelling.
Greater Toronto home prices have re-entered a downtrend. The composite benchmark fell 0.5% (-$5,400) to $1,068,500 in March, the first monthly downtick since last October. Prices are down 3.8% (-$41,860) compared to last year. Prices have been trading in a relatively narrow range, with last month roughly the same as it was nearly 4 years prior.
Toronto Home Prices Move Deeper Into Negative Annual Growth
The annual rate of change for a composite benchmark home across Greater Toronto.
Source: CREA; TRREB; Better Dwelling.
Annual growth dropped into negative territory over the past two months. It tested a positive move three times within two years, but struggled to maintain the rate. A sharp downtick following the attempts likely means prices still need to cool further since hitting a record growth surge of 37% at the start of 2022.
Toronto Real Estate Sees More Inventory & A Lot Less Sales
TRREB real estate sales vs new listings for March.
Source: CREA; TRREB; Better Dwelling.
Greater Toronto real estate sales were weak last month, but it wasn’t due to a lack of choice. Home sales dropped by 23.1% to 5,011 units in March, marking the worst sales in at least 15 years. At the same time, new listings climbed 28.6% from last year to 17,263 homes—the largest surge in 3 years. The slow sales are attributed to buyers focused on the tariff threats and a new election. However, that didn’t seem to bother sellers who came out in full force.
A multi-year low for sales and a rise in new listings helped Toronto move into bear country. The sales to new listings ratio (SLNR) was at just 29% in March, indicating one of the weakest demand balances on record. A ratio this low indicates a buyer’s market, where prices are expected to fall as those in the market have the negotiating power.
“Homeownership has become more affordable over the past 12 months, and we expect further rate cuts this spring,” explained TRREB President Elechia Barry-Sproule.
Adding, “Buyers will also benefit from increased choice, giving them greater negotiating power. Once consumers feel confident in the economy and their job security, home buying activity should improve.”
The board’s chief analysts chalked up the decline to an issue we’ve been hearing a lot on—household uncertainty. Canada’s largest trade partner abruptly plunged the country into a trade war, and a looming federal election can abruptly change policy. If these issues resolve promptly and smoother than anticipated, the board expects home sales to increase. However, that won’t occur until consumers feel stable and secure, and are ready to resume long-term commitments.
TRREB’s ambitious take is somewhat contrary to the market on interest rates, and by-extension any influence on demand. Most commercial banks have been warning that inflation has been ramping up. Scotiabank went so far as to warn The Bank of Canada’s most recent rate cut undermines its policy and limits its ability to respond to the trade war. They believe it reduces the odds of further cuts in the near term.
Home sales go down & inventory up.
Home prices:
– Toronto: down
– Vancouver: up
We’re nailing it over in Vancouver.
What’s interesting about Toronto’s real estate correction is prices haven’t declined but it shows indicators common with every other bubble pop. Elevated unemployment, stores shutting down, rising crime, Vancouver-like tent cities popping up every, a general sense of lawlessness, etc.
I recall visiting in 2019 and stores were mostly shut down along Queen St, but otherwise it looked totally different.
I lived through the last correction in the early 90s and I can tell you things looked a lot like this before prices dipped.
What will be interesting is that governments have never been more involved in trying to mitigate price declines and giving developers huge cuts. Markets need to correct for a reason, but so if it remains so deeply unaffordable it might collapse for an even longer time.
GTA Landlord. I agree but its going to be more difficult for government to keep this ponzi scheme going even with lower rates. The market was going downhill before Mr. Trump and he may just be adding icing to the cake.
Agreed. Looks like the end of 1989 all over again where everyone wanted to sell and nobody wanted to drop their price because they would be underwater. There’s gonna be pain the newer generation has never seen…
“Once consumers feel confident in the economy and their job security, home buying activity should improve.” –
So about the same time as the earth turns into a mass fireball- 2050?
Canada is in the midst of a long running recession. The misuse of credit, immigration and monetary expansion used to camoflage the recession has made things much worse.
Today we are on the precipace of a majore correction in housing.
The problem is simpme, gdp per capita has declined vs our us neighbours by 68% since 2014. This isnt real gdp, as this is based on the usd as a constant. Even worse canada started out in 2014 with less consumer debt to income than the usa?
So we are heading int a class 5 hirricane. Housing prices have to correct, simply because their fmv is almost half what they are offered at.
The constant misuse of credit expansion by the govt, boc and private banks has us cornered. At this point we literally cant afford to invest in job creating investments, as ever more of ourcapital is tied up in residential real estate.
The various schemes from thr liberals to add ‘supply’ ignore the basic problem that prices are far too high, not that thdre isnt supply.
So like an addict who thinks thathis problem is his.car, not the drugs, there is no chance carney can fix this.
As nited above, my parents house in toronto sold in 1988 for more than it was worth till 2006. So all thrse.peipke who think real estate is safe, should consider that it lost half its valur by 1992, and bankrupted 3 owners. So its not goinv to be fixed by bankers who keep doing this over and ovet, it needs a steep and prolonged price correction.
FYI, a certain Vancouver Facebook Housing Collapse Administrator thinks your numbers are fake. They also think we’ll all be snapping up detached houses in Vancouver for $400,000 in a few months.
Canada needs this humbling recession. There’s been so much arrogance and low productivity. Pain is good.