Toronto Market Takes A Summer Break

Detached Homes

The Toronto market is experiencing a summer slowdown. Prices for detached homes in the City of Toronto fell 4% in July, from $1,699,881 to $1,633,649. A summer slowdown is normal, as both buyers and sellers take a break from real estate to enjoy the warm weather. The break is more exaggerated this year. It coincides with the loosening of Covid restrictions and a greater-than-normal desire to get away from the city. For perspective, prices are still 6% higher than the 2021 peak, and 3% higher than the ‘bubble peak’ in 2017.

In July, sales of detached homes were down by 37% from the spring months, and active listings were down by 20%. The inventory of homes for sale was, therefore, higher — but still under 1 1/2 months’ supply and still deep in seller’s market territory. With fewer buyers, bidding wars were less frequent and price adjustments were more common. Many of those price adjustments were upward, following unsuccessful attempts to elicit multiple bids via underpricing.

The Toronto market for houses will probably remain slow through August and then pick up once buyers return from the summer break in September. Prices will likely increase in the fall, though perhaps not as high as the spring.

Condominium Apartments

The condo market in the City of Toronto has shown more resilience than the market for detached homes. Prices in July were almost the same as in May & June, and only 1.6% below the all-time high reached four months ago.

Sales and active listings for condos were lower in July than they were in the spring, but not as much as for detached homes. Sales were down by 22% and listings by 11%. The inventory of condos for sale was thus higher than June, but still under 2 months’ supply. Condos, like houses, are still in a seller’s market.

As for detached homes, I expect that the slower market will continue for condos in August. Prices may dip a little next month but should rebound in September. Covid easing is likely helping first-time buyers disproportionately, as they were hardest hit by lockdowns. This could explain, in part, why condo prices have held up better. Also, this points to a strong market for condos in the fall. Always assuming, of course, that another Covid wave doesn’t cause renewed business restrictions.