The Greater Toronto real estate price boom continued to unwind last month. Toronto Regional Real Estate Board (TRREB) data shows the price of a composite benchmark (typical) home fell once again in October. Prices have now rolled back to where they were 3-years ago, falling nearly half the cost of a home just 10-years prior.
Toronto Real Estate Prices Rolled Back 3-Years, Peak Losses Hit $253k & Counting
The composite benchmark price of a home in Greater Toronto, in Canadian dollars.
Source: TRREB; CREA; Better Dwelling.
Greater Toronto real estate prices have officially rolled back to where they were 3 years ago. The price of a typical home fell 0.8% (-$8,400) to $1,060,300 in October. It helped to push prices 3.3% (-$36,700) lower than last year, and returned prices to the lowest level since September 2021. Most definitely not what the city’s real estate investors have become accustomed to.
Is The Bottom Near? Toronto Real Estate Prices Show Minor Signs of Firming
The annual growth rate for the composite benchmark home across Greater Toronto.
Source: TRREB; CREA; Better Dwelling.
Those looking for price stability may be in luck soon. The negative annual growth has gotten smaller for 3 consecutive months now, and off the 5% decline reported back in July. It’s too early to run with that take, since monthly declines are still substantial. The slowing of 12-month declines is largely telling us the size of declines are just smaller than last year. That’s a long way from the narrative that growth will return soon.
Toronto Real Estate Prices Have Fallen 19% Since Peak, Nearing Some Definitions of A Technical Crash
The decline seen last month was just enough to plunge to a new 3-year low, beating the past two. Since hitting a record high in March 2022, the TRREB benchmark has fallen 19.3% (-$253,500). To put the decline in context, the dollar value is nearly a quarter (23.5%) of the current price, and almost half the price (47.2%) of a home 10-years ago. The drop is just shy of being technically considered a “crash,” a price correction of 20% or more from the all-time high in a short period.
Greater Toronto home prices are still falling but they are showing some minor signs of firming. This is largely due to falling rates, or anticipating rates will fall, helping to motivate buyers. However, this is still a market at a price point that’s largely out of reach for households and dependent on investors. Those investors were motivated by the narrative of higher rents supporting these valuations. Now with immigration policy seeing sharp reforms in the coming months, rents are expected to decline and the narrative will shift. That may motivate more investors to step back and wait a little longer for a clearer market direction.
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