Toronto House Prices Fall In May

Houses

City of Toronto house prices fell 4% in May as compared with April. It’s unusual for prices to fall in May, especially after rising steadily since January. Typically the spring market starts to slow down in June, remains quiet through the summer months, and then rebounds after Labour Day. We’ve seen early slowdowns like this only twice in the past 10 years, in 2017 and 2022. In both of those cases, prices continued to fall through the summer and fall. It’s far too soon to project a similar outcome for the rest of this year, but it’s definitely a yellow flag.

The sales trend for houses in May is more encouraging. Sales of houses were higher than in April and even slightly higher than last May. Also the inventory level of houses for sale remained low, less than 3 months’ supply, solidly in ‘balanced market’ territory. These data are not at all consistent with a falling market, so maybe the May prices are a short term anomaly. We’ll see how this plays out in June.

Condo Apartments

The Toronto condo market continues to languish, weighed down by high inventory levels. Prices actually increased modestly in May, however, they remain well below last year.

The inventory of condos for sale remains in buyers’ market territory, however, it is significantly lower than last year. This suggests that the condo market may finally be approaching a bottom, although it could be another year or two before prices begin to recover.