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.