The Greater Toronto real estate rut continued last month. Toronto Regional Real Estate Board (TRREB) data shows the price of a typical home fell once again in September. Despite a mild improvement in sales, inventory climbed much faster helping to apply further downward pressure on prices. The benchmark is now within spitting distance of prices rolling back 3 years.
Toronto Home Prices Are Close To Rolling Back 3 Years
The composite benchmark price of a home across Greater Toronto.
Source: TRREB; CREA; Better Dwelling.
Greater Toronto real estate continues to slide lower. The price of a benchmark, or typical, home fell 1.2% (-$13,500) to $1,068,700 in September. This marks the fifth consecutive monthly drop, rolling back prices to the start of the year. The mini-boom in anticipation of falling rates has now almost entirely reversed.
Toronto Real Estate Price Growth Remains Negative, But Will That Change Soon?
The annual rate of change for a composite benchmark home across Greater Toronto.
Source: TRREB; CREA; Better Dwelling.
Home prices have fallen significantly over the past few years, and are close to reaching a new milestone. Home prices are 4.6% (-$51,500) lower than last year, and have fallen 18.7% ($245,100) since peaking in March 2022. Even if price declines slow further, just a quarter of the decline seen last month will roll prices back to September 2021 levels, reversing 3 years of movement.
Reversing post-2020 rate cuts is still a long way off. The benchmark would need to drop another 21.8% before prices are back to March 2020 levels. It really emphasizes how frothy this market’s been in recent years.
Toronto Real Estate Inventory Surges, Now Deeper Into Bear Market
There was a minor improvement in one area—home sales. TREBB reported annual growth rose 8.5% to 4,996 homes in September. It sounds like a substantial move, but the comparison period was one of the slowest on record last year. Still, some growth is better than no growth.
Greater Toronto is seeing a lot more sellers anxious to get out of the market. New inventory climbed even faster than sales to hit 18,089 new listings in September, up 10.5% from last year. The build up of inventory helped pushed active listings up 35.5% to 25,261 units over the same period. Toronto inventory went from scarce to a glut as fast as raising rates killed profits for speculators.
The surge of inventory has the market deep in bear country. The sales to new listings ratio (SNLR) fell to 28% last month. An SNLR below 40% is considered a seller’s market, where the industry generally believes prices will fall. Toronto rarely plunges to this level and with the flood of inventory and rental vacancies, the odds are stacked against a quick bounce for now.
English (US) · 