Recovery or Trap? Toronto Real Estate Prices & Sales Rise, But Still Weak

Greater Toronto real estate is finally showing some signs of improvement. Toronto Regional Real Estate Board (TRREB) data shows prices climbed again in April. The climb was accompanied by more sales and fewer listings, which sounds a lot like a recovery. That is, until one realizes last month was still one of the worst Aprils on record, even with the improvements. 

Greater Toronto real estate prices rose 0.2% (+$2.3k) to $944,100 in April, marking the third consecutive month of increases. The price of a typical home remains 6.6% (-$66.2k) lower than last year, though it currently sits at a 5-month high. 

Prices bouncing to a 5-month high isn’t exactly unexpected after such a sharp downturn. The market’s still pricey, and there’s no guarantee the correction is over. However, after a 26.2% (−$335.7k) drop from the peak, it seems like a relative deal to sidelined buyers. This is the definition of pent-up demand, with sales reflecting a similar trend. 

Home sales climbed modestly last month. There were 5,946 existing homes sold through TRREB in April, 7.0% higher than last year. It’s a welcome improvement from the worst of the downturn, but still 18.5% below 2024 volumes. If it wasn’t clear from the chart above, sales remain historically weak. Last month was the third-weakest April for sales in at least 16 years, only behind last year and April 2020. Better than last year and the first month of pandemic lockdowns doesn’t sound quite as fun as 7% growth, does it? 

Fewer sellers turned out last month, indicating the market is somewhat firming. There were 17,097 new listings in April, down 9.3% from last year. More buyers and fewer sellers helped boost the sales-to-new listings ratio (SNLR) to 34.8%. However, that’s still well within a buyer’s market where the industry expects prices to continue falling. 

There may be a reason for the lack of new listings though—a massive inventory glut. TRREB data shows 25,110 active listings in April, 6.4% lower than last year but still the second-highest in at least 16 years. Inventory is tightening relative to last year, but still high for Greater Toronto. For context, it’s over double the inventory seen during the sharpest price drops in 2022-2023.

Home prices are up, sales are rising, and inventory is pulling back. These are all signs of a firming market, but zooming out tells a different story. Buyers have likely noticed the market is firming relative to last year, sparking FOMO. Sales rising 7% and inventory falling 6.4% definitely sounds like a tighter market on its own, especially if you’re seeing prices climb while trying to decide on a purchase price. 

However, factor in another year of data and the context changes. Especially when viewed from the perspective of the regional economy or macroeconomics. The market isn’t even back to 2019 levels, which was already a relatively weak year for the region, even with the substantial population growth over the period.