Greater Toronto real estate was supposed to firm up this year, but the market continues to erode. Toronto Regional Real Estate Board (TRREB) data shows sales slipped to print one of the worst Augusts on record. Prices also made a sharp drop as inventory climbed to rarely seen levels, as the region faces one of the weakest markets on record.
Greater Toronto Home Prices Made a Massive $15k Drop Last Month
The benchmark price of a typical home across Greater Toronto.
Source: CREA; TRREB; Better Dwelling.
Greater Toronto home prices slipped lower once again. The benchmark price of a home fell 1.4% (-$15,100) to $1,082,200 in August. Prices are now similar to October 2021, moving mostly sideways for the past few years.
Toronto Home Price Growth Has Been Negative For Nearly Two Years
The annual rate of change for a composite benchmark home across Greater Toronto.
Source: CREA; TRREB; Better Dwelling.
Annual growth improved due to a base effect, though prices are still very much in decline. The benchmark in August was 4.6% lower than last year, which seems like an improvement from the previous month. However, it’s just a base effect—prices fell a little less in August 2024 than last year. The longer prices are in decline, the lower they go.
Greater Toronto home prices are now 17.6% (-$231,600) lower than the record high reached in March 2022. While prices haven’t budged much in the past few years, they remain more than 23 points higher than pre-pandemic.
Toronto Home Sales Had The Worst August In 24 Years
Greater Toronto’s weakness is being driven by a total lack of demand at this price level. Sales fell 5.3% from last year to just 4,975 homes in August. It was the fewest sales in August since 2000, and it wasn’t just last month. Year to date, the total number of sales were the fewest since 2001, when the board was much smaller and there were a lot less people across the Greater Toronto region.
Toronto Inventory Climbs To Unusually Lofty Levels After Weak Sales
The downturn hasn’t slowed sellers from trying to exit the market. New listings for the month climbed 1.5% to 12,547 homes in August. The listing surplus helped push total active inventory higher for a fifth consecutive month to a whopping 22,653 homes for sale in August, up 46.2% from last year. That’s the highest level of active inventory in August going back at least 10 years.
Fewer sales and more new listings mean further erosion of the sales to new listings ratio (SNLR), a fundamental indicator the industry uses to determine the strength of demand. Greater Toronto had an SNLR of 39.7% in August. That makes it a buyer’s market according to the industry, which is a friendly way of saying prices are expected to fall if it persists.
Greater Toronto’s real estate industry has stated they believe demand will pick up next year. Though they also stated that last year. In the meantime, negative data has been piling up and demand for new homes has hit a record low.
This is what demand destruction looks like and it is only just starting. No one left to buy or wants to buy at these prices.
Home hoarders, greedy speculators and boomers that took out supply from future home buyers should suffer for their excess. There will be no mercy for this segment.
A nation is carried forward on the backs of young people and no nation progresses if productivity is down because the youth are all demoralized and see no future. Time to re-energize and rejuvenate the youth. Real estate must drop at least 40% from here to revert to the mean of 3 times income.
Sounds like Armageddon for the poor Realtors. And yet, analysis by the Globe and Mail indicates that average prices need to fall by about 40% to restore affordability for the general population on the GTA market.
I guess sellers will continue to cry about it, buyers from 2022 will continue to choose between mortgage payments or groceries, and everyone else will be locked into life as second class citizens.
Greed is good, amirite?
This is what demand destruction looks like and it is just a start.
Reversion to mean of 3 times income is required to properly flush out years of excess and wild wild west speculation.
The stats are telling a funny story. If you look at the announcement prices are down in the Toronto area4.6% on average ,sounds not bad but not the real truth. Sales of single family housing have not dropped in quantity all that much 1% over last year but, condos are well down 11% as are townhouses etc. Detached houses fetch higher prices so the average price will be pulled up . True falls in each category are probably much more than 4.6%.
Vancouver is dropping now too.
Nothing is selling. New USA homes are 400K or less. See youtube, zillow, redfin and landsearch. Be smart -live there half the year or travel stay with family friends when not in town. Dump all your Canadian homes and condos.
https://betterdwelling.com/toronto-real-estate-sales-had-the-worst-month-in-24-years-prices-dropped-15k-over-31-days/
At 500/day – that’s going to be 182500 + opportunity cost of the capital for not diving into the RE market. It literally pays to wait. That’s one huge falling knife with 2025-2027 renewal wall coming.
How long will it take for investors and hedge funds to jump into to put a bottom to this market?
$15000 is a small fall. The decline could quite possibly be 5 to 8 % per month like it did in Vancouver in the 80s, The market fell 40% in 6 months ,it can be quite rapid once it kicks off.
As a retired R.E.Broker; having been through the r.e. markets of the 80’s/90’s/ 2000’s; none of the so called “experts” were right!
Different times; economic conditions; inflation; costs of goods and services all weigh in. Income to personal debt is at historic levels ( $1 in..$1.87 out) means people are living on borrowed money ( C.C./ Lines of Credit) to live way beyond their means or to make ends meet! Tough times/recession? I don’t see it anywhere!! Restaurants/patios/bars packed….filled grocery carts….new expensive vehicles everywhere….tons of traffic so $1.60 a litre isn’t hurting them either!!!
I ask alot of people in my age group how they can live like this unless they are making $300k+ a year which they aren’t; and they all say….” They can’t…they live a financial disaster world of accumulating debt; live with their parents or three families living under one roof!” It’s not wealth…it’s mounting debt…until you have exhausted all your credit….then CRASH!!
I have seen this insanity 4 times in my life span with predictable results and outcomes!! Humans never learn!! They don’t save for a rainy day…because their BMW monthly payments prohibit that! Then there are those all inclusive Caribbean vacations at $3-400 a day per person!!
Affordable housing is just a dillusional fantasy. In 1982; a 560 sq.ft.one b.r. apt. was $316/mth. That same apt. today is $2,200! Same apartment but $1,884 more! That’s a 596.2% increase. So unless your income went up by at least that much in the last 42 years ( I’m 70 ) along with the increased costs of everything else; you can’t afford to live in the GTA.
You need an income of $224,00 per year plus a d.p. of $ 312,000 to buy your average priced home. Who makes that? Who has $312k lying around?
A 336% increase in food bank recipients…..over 12,200 homeless in Toronto. We have alot of serious issues here yet Trudope just waves at the people lining up at the food bank and waves to all the encampment homeless….😁😁👋👋👋….on his way to Ruth Crises Steakhouse with his entourage of 12 security at $400 a plate at taxpayers expense!! Probably saying at the Presidential suite at the Royal York Hotel!!
Unfortunately, everyone who bought a home in the last few years overpaid by 50%. It will take a whole generation to catch up.
Market Report Summary for August 2024
Updated September 5th, 2024
The Greater Toronto Area’s benchmark home price for August 2024 was $1,082,200, down 4.6% year-over-year.
The average home sold price in the GTA decreased 0.7% year-over-year to $1,074,425 for August 2024.
Detached home average price decreased by 0.2% year-over-year to $1.41M.
Semi-detached home average price decreased by 3.9% year-over-year to $1.03M.
Freehold townhouse average price decreased by 3.1% year-over-year to $991k.
Condo apartment average price decreased by 4.4% year-over-year to $675k.