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Toronto's real estate market is experiencing a spring downturn and appears to be clearly biased towards buyers after four straight months of rising sales. While the increase in inventory has helped stabilize prices, it hasn't translated into more transactions as sales have declined across the Greater Toronto Area.
According to the Toronto Regional Real Estate Board's (TRREB) latest report, new listings increased 47.2 per cent year-over-year, with 7,114 homes changing hands last month, a five per cent decline from April 2023. Meanwhile, TRREB's Home Der Benchmark Price Index (HPI) Composite remained relatively stable, falling less than one percent year-on-year to $1,128,100.
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The perceived buyer's market is likely largely due to an oversupply of condo inventory.
Royal LePage sales representative Thomas Delespierre said buyers still face stiff competition in certain market segments, particularly detached single-family homes.
“There are still a lot of offers and bidding wars for single-family homes because the inventory is not that large,” Delespierre said. “But with condos, a lot of new buildings are nearing completion and there’s a lot more inventory to choose from.”
Toronto saw a significant increase in new condominium registrations, according to a report released Wednesday by real estate consultancy Urbanation. “A total of 23,095 new condominiums were registered over the past four quarters, a 21 percent increase over the same period through the first quarter of 2023 (19,028) and the third-highest four-quarter total on record,” the report said.
Still, TRREB found condo sales fell 6.5 percent year-over-year in April.
TRREB President Jennifer Pearce highlighted a clear disparity in buyer and seller behavior in her organization's most recent report.
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“Listings increased significantly in April compared to last year and last month,” Pearce said. “Many homeowners are expecting an increase in demand for condominiums in the spring. Although sales are expected to pick up, many potential homebuyers are likely waiting for the Bank of Canada to actually start cutting its key interest rate before purchasing a home.”
TRREB senior market analyst Jason Mercer explained that the increased inventory resulted in minimal price movements and gave buyers more bargaining power.
In April, the average price increased 0.3 percent year-on-year, reaching $1,156,167. Prices for single-family homes, semi-detached homes and condominiums recorded average price increases of 1.8 percent, 0.3 percent and 0.6 percent, respectively. The average price for terraced houses fell by 3.7 percent over the same period.
In the city of Toronto, average home prices rose year-over-year for all but one home type in April. Prices for single-family homes, semi-detached homes and condominiums rose by 2.2 percent, 2.9 percent and two percent, respectively. Terraced houses fell by 3.9 percent.
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Mercer predicts that lower borrowing costs will tighten market conditions in the future and potentially drive price growth.
“Looking forward, lower borrowing costs are expected to result in tighter market conditions in the coming months, leading to renewed price increases, particularly in 2025,” Mercer said.
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