The Greater Toronto real estate market is still in freefall as the anticipated boom proves to be an epic bust. Toronto Regional Real Estate Board (TRREB) data shows the price of a typical home (composite benchmark) continued to fall in April. A typical house in the City is now under the $1 million mark, as the multi-year downturn led to the highest April inventory in over 15 years, and sales fell to 90s-real estate crash levels.
Greater Toronto Real Estate Prices Dip, City Plunges Below $1 Million
Greater Toronto home prices are still falling. TRREB reported a composite benchmark price of $1.01 million in April, falling 5.4% (-$58.1k) from last year. In the City of Toronto, it fell to $985.4k, down 4.5% (-$46.2k) over the same period. Buyers haven’t seen the composite this close to the million dollar mark in years. The City’s benchmark falling under the $1 million threshold is a grim milestone for a market some experts thought was invincible.
Toronto Home Sales Crash To 1997 Lows As More Sellers Appear
Greater Toronto real estate sales through the MLS.
Source: CREA; TRREB; Better Dwelling.
Driving the price declines was the collapse of sales. Annual growth was down 23.3% with just 5,601 home sales recorded in April. It was the weakest buying demand since 2020, the first full month of pandemic lockdowns, when buyers faced physical barriers to purchasing a home. Outside of 2020, one has to go all the way back to 1997—the depths of the last major real estate bubble collapse.
At the same time, inventory has been applying significant downward pressure on prices. Sellers listed 18,836 homes for sale last month, up 8.1% from last year. Fewer buyers and more sellers drove the sales to new listings ratio (SNLR) down to 29.7%, placing the market firmly in a buyer (or bear) market. With new listings more than triple the volume of sales, experts generally see falling prices with such a weak demand balance.
Toronto Real Estate Hasn’t Seen This Much Inventory In 15 Years
Greater Toronto real estate active listings for April.
Source: CREA; TRREB; Better Dwelling.
Over the past few years, fewer sales and higher listings have led to inventory buildup. Total active listings climbed to 27.4k homes for sale at the end of April, up 54.0% from last year. It was the highest inventory for the month for at least 15 years, when the data series began. However, the odds favor seeing the record go back much further. The population has grown 65% since sales were this weak (pandemic excluded), and a near-record low persists.
Toronto’s collapse in real estate demand is mainly attributed to tariffs. Tariffs certainly contribute, but ignoring that market demand has been weak for years is naive. Canada’s largest bank previously warned that investors have replaced first-time buyers, after pricing them out of the market. Investors have disappeared with the easy money, but prices have yet to fall enough to incentivize buyers to jump back into the market.
Affordability is now just one of Toronto’s hurdles before reviving its market. The city’s unemployment rate is now 8%, and the exodus of young workers to Alberta continues. That makes Toronto a very different value proposition compared to the market they were priced out of a few years prior. Never count out a quick recovery, but expecting one may be wishful thinking.
Bank of Canada MUST emergency drop interest rates to 0% to support house prices.
Also immigration should be increased to at least 5 million a year.
Canadians have worked hard to purchase homes and the prices must be supported by government.
Haha desperate much? Housing prices will rise forever right? So many of my friends working in Toronto have been laid off. No appetite to buy houses, even if interest rates drop. You’re going to learn a hard lesson in economics. The government can’t save you.
So, just as in the wizard of Oz (which is based on the 1880-1918 Gold / Silver debate in the USA for monetary policy), we now are living in a world of myth and fantasy.
Dropping rates is seen as some sort of panacea for all that ails Canada’s economy. The problems with this are:
1. Canada has failed to manage inflation in 3 ways. First is failing to measure CPI properly, particularly failing to measure the actual cost of interest related to an asset.
2. Canada’s rates beyond a variable rate mortgage are impacted more by Bank bond rates than the BoC overnight rate. The yield curve has been flat for a long time priomary because there is a lack of supply of investment grade bonds, not because of the BoC. If the yield curve returned to normal (and it will since its maionly BB pensions keeping it like this) we will see a 5y 200bp higher than a variable or more.
3. ON has become an economic sinkhole. The entire economy is based around 4 sectors – Housing, banking, govt, and autoparts. Currently, none of these sectors is producing any sort of value for the Canaidna economy, it is just parasitic growth, no actual value for GDP at all…
So now we will watch Carney subsdize banks, housing and govt even further, all to maintain an unrealistic price for housing, ridiculous risk free profits for banks, and subsidioes for ‘industry’ there.
Any wonder why AB, SK want to leave this country?
And all realtors, construction workers and bankers should get a tax funded GIB of $10k/ month?
Now the elections are over. Time to buy a USA house to live in every fall and winter. Millions will off load their Canadian homes and condos to kids and relatives and return to stay with them every spring and summer and enjoy life instead of snow shovels
https://www.thisoldhouse.com/moving/best-cities-for-snowbirds
And get deported to El Salvador for saying something the orange Cheeto doesn’t like? No thanks. Canadians aren’t that dumb (as the election results have shown).
Aren’t???
Well, election results shown exactly opposite – dumber than we could imagine.
Electing person who ASSISTED 2008-2009 crash AND created this BUBBLE – that’s very smart, yeah.
Good luck and pray to God.
You wish. But not going to happen.
Boomers are trapped in their over valued homes which they will be unable to offload to other suckers in this illiquid bear market.
They will live here and die here (sorry, not sorry). But at least they can enjoy their paper home over valuations. And their kids will always be there to shovel for them.
Look, it has cost you and me hundreds of Billions to maintain these ultra high prices. The feds have basically used every trick they have to keep prices high. So now, Carney is in a spot. He was given his job by bankers, since they like money, and the Liberals kept them form failing in covid.
So the questions is not if, but when this will collapse. The boomers are fine, its all the dummies who bought houses since 2016 that are done.
So your solution to massively overprived housing is to buy more housing? Lemme guess what kind of ‘investments’ you make?
So now lets see what our ‘new’ govt does? Im betting the same as the ‘old’ govt. Use the CHMC, BDC, EDC to prop up housing prices. Under the fraudulent claim that more ‘supply’ is the issue (though clearly it is massively overvalued prices) Carney and Freeland will throw Billions to make the GTA, Ottawa, Coastal BC even less affordable.
Ecven worse, the job market, and Canada’s competitiveness has completely collapsed. The Govt spent at least $500B in failed investments in EVs, green tech, almost all of it in ON, only to see that with the exception of the much hated piupeline the Liberals bought, not one of them has returned even a panny on those investments?
So now we are to presume in the face of a 180 from the USA on Trade, a global movement away from free trade, that Carney can ‘make good investments’?The problem is, beyond lettingPRIVATE BANKS EXPONENTIALLY INCREASE THE M3 MONEY SUPPLY TO BUY OVERPRICED HOUSING, Carney’s actually ‘investment’ experience is non existent.
Green investments have now consistently failed to produce any sort of return at all, and are just a cost at this point. Given that Carney seems unwilling to put aside his dismal, failed net zero model, we will end up 4-5Tr in debt and no further ahead in 4 years?
The good news is the Liberal Magic show of rebranding wont cover up this catastrophic fail.
For the ‘free market’ in housing (if one ever existed) to balance it reqquires that the GTA see prices back to where the median family income can buy an average property, so $500-600k. Only then will living in the GTA be viable for the now extinct middle class. Without immmigration, and constant handouts from Ottawa, one can only expect this to get worse.
However, the good news is in 10y, our economy will be better off, with investment going into actually produictive investment, not 500 sq foot condos to put on Airt BnB.
START PACKING THE BANKS ARE FREAKING OUT
This is so silly. It’s not in freefall, more like a correction. Housing in Toronto has been grossly overvalued.
And all the sad people going on about boomers and their homes, should think about this. They probably paid less than 100,000 for their homes and they are now still on average worth at least a million. I think the boomers are doing just fine.