Stable Fall Market Continues in Toronto

Prices in the City of Toronto continue to hold steady through mid-November. Sales, however, are slowing as we approach the holiday season. After a couple of years of ‘Covid-stolen’ Christmases, it would not be surprising to see many buyers and sellers take a break from real estate to get festive.

Prices

Average freehold prices in Toronto have stayed in a narrow range from $1.4-$1.5 million since the ‘bubble correction’ ended in July. While prices are presently about 14% below last November, this is misleading since the bubble was expanding strongly at that time. A better comparison might be last summer, when prices were about 5% higher than today. So, freehold prices are lower than last year but not that much lower.

Condo prices in Toronto have also remained within a fairly tight range since July, and are now slightly higher than last year. The condo market has been much less volatile than the freehold market, with a  peak-to-trough bubble correction of about 11%. This compares with a correction of about 27%. This is partly because condos are lower priced and therefore ‘buffered’ from the impact of higher interest rates. It’s also because condos are a popular investment vehicle, and the rental market is very strong.

Sales and Inventory

Sales of both freehold and condo properties are tracking about 20% below October as of mid-November. Active listings for both property types are roughly unchanged, and so inventory levels are increasing. The inventory estimates for November shown in the charts below assume that sales will continue at the present pace until the end of the month, and that active listings will remain unchanged.

For condos, this means that inventory will be well over 4 months’ supply at the end of November, well into buyers’ market territory. For freehold properties, inventory will remain under 3 months’ supply, still a sellers’ market. This suggests that we might see some divergence between the condo and freehold markets over the holiday season.

Bottom Line

The Toronto real estate market has remained steady, for all property types, throughout the fall season. We will probably see a more or less normal seasonal slowdown over the next couple of months. The spring market is inscrutable at this time. One could make cogent arguments for prices moving either upward or downward next year…