Greater Toronto real estate buyers are returning, but the market has a long way to go. Toronto Regional Real Estate Board (TRREB) data shows that both sales and home prices climbed in November. The positive market news is overshadowed by the unusually lofty levels of inventory that continue to rise. Rising prices demonstrates FOMO is returning since buying still hasn’t recovered to normal monthly levels—even before adjusting for population. However, sellers appeared in volumes rivaling some of the record’s busiest spring markets.
Greater Toronto Real Estate Prices Get First Uptick In Months
The composite benchmark price for existing homes across Greater Toronto.
Source: TRREB; CREA; Better Dwelling.
Greater Toronto real estate prices made a minor but potentially significant uptick. The benchmark, or typical, home price climbed 0.1% (+$1,400) to $1,061,700 in November. That’s 1.8% (-$19,600) lower than the same month a year prior. Monthly progress seemed relatively minor, but it was the first growth observed in over half a year.
Greater Toronto Home Prices May Return To Growth
Annual growth rate of the TRREB composite benchmark price.
Source: TRREB; CREA; Better Dwelling.
One month of progress isn’t a trend reversal, but the market is showing some signs of improvement. This was the first monthly move higher since March—8 months ago. The annual growth has also been getting smaller, leaving the smallest gap since April.
Greater Toronto Home Sales Up 40%, Still Weaker Than Normal
Most of the coverage this morning focused on the sharp recovery in sales, but there’s a caveat. The board saw 5,875 existing homes sold in November, a 40% increase from last year. That’s an incredibly big jump in contrast with the past two years, but it’s still historically weak—even without factoring in other details like population growth. Last month was 35% lower than the same month in 2021 and 17% below 2019. Demand is improving but it has yet to return to normal, despite the industry hype.
Greater Toronto real estate inventory remains unusually strong going into the winter. Sellers listed 11,656 new listings in November, up 7% from last year—the biggest turnout of sellers in at least 10 years.
Toronto Real Estate Inventory Hits Highest Level In Over 10 Years
TRREB home sales and active listings for November.
Source: CREA; TRREB; Better Dwelling.
Weak demand and a flood of sellers helped build higher inventory levels. There were 21,818 active listings for sale in November, up 30% from last year. To say this is a lofty level of inventory would be an understatement. November hasn’t seen this much inventory in at least a decade. The current level is even higher than in May, the peak of the busy spring market that also showed a multi-year inventory high.
Greater Toronto real estate prices rising in this environment is an interesting thing to note. Yes, home sales have increased suddenly, likely making buyers feel a little FOMO. However, inventory is still high from a historical perspective—an even bigger gap from the current suppressed levels. In other words, it’s worth watching to see if this was pent-up demand from a relatively small group of buyers, or the start of a firming market.
FOMO. Same as the rush to get into the market back in the spring. There was a rush of people panicked about getting in, then 8 months of price declines.
Buyers that are end users won’t care in a few months if prices fall. It’s investors that are rushing out that care.
I don’t understand how prices can rise when there’s more inventory. It goes against the whole “more inventory to bring prices down,” doesn’t it?
You must be new here. Did you miss the part where they leaked the CMHC messages that show prices need to rise in order to build more? If prices rise as a pre-cursor to building more, how do prices fall as more is built?
interesting .. listening: does it mean – inflationary prices for real estate intensionally ?
It’s because sales are up so much more than new listings. Sales are up by 40.1 per cent compared to November 2023. New listings are up by 6.6 per cent year-over-year. You can see details like this on the TRREB website.