The Greater Toronto real estate market was anticipated to stabilize this year, but instead, it continues to struggle. Recent data from the Toronto Regional Real Estate Board (TRREB) paints a grim picture, with sales dropping to some of the lowest levels seen in August. The market is grappling with declining prices and an abundance of inventory, signaling one of the weakest periods on record.
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Greater Toronto Home Prices Made a Massive $15k Drop Last Month
- The benchmark price of a typical home in Greater Toronto took a significant hit, falling by 1.4% or $15,100 to $1,082,200 in August. This price point is reminiscent of figures from October 2021, indicating a stagnant trend in recent years.
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Toronto Home Price Growth Has Been Negative For Nearly Two Years
- Despite a slight improvement in the annual rate of change, prices in Greater Toronto continue to spiral downwards. In August, the benchmark price was 4.6% lower than the previous year. This apparent improvement is merely a reflection of prices falling slightly less than the year before, suggesting a prolonged decline in housing prices.
- Greater Toronto home prices are now much lower than the record high reached in March 2022, having dropped by 17.6% or $231,600. While there hasn’t been much movement in prices in recent years, they still stand more than 23% higher than pre-pandemic levels.
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Toronto Home Sales Had The Worst August In 24 Years
- The weakening Greater Toronto market is characterized by a stark lack of demand at current price points. August saw a 5.3% decline in sales compared to the previous year, with only 4,975 homes sold. This marked the lowest August sales figure since 2000. The overall sales performance year-to-date is the weakest since 2001, indicating a significant downturn compared to previous years.
- Toronto Inventory Climbs To Unusually Lofty Levels After Weak Sales
- Despite the challenging market conditions, sellers are actively trying to exit the market. The number of new listings rose by 1.5% in August, reaching 12,547 homes. This surge in listings has contributed to a continuous increase in total active inventory for the fifth consecutive month, reaching a staggering 22,653 homes for sale in August. This level of active inventory is the highest seen in August over the past decade.
The deterioration in sales and the increase in new listings have led to a decline in the sales-to-new-listings ratio (SNLR), a key indicator of demand strength. Greater Toronto recorded an SNLR of 39.7% in August, signaling a buyer’s market according to industry standards. This implies that prices are likely to fall further if this trend persists.
The real estate industry in Greater Toronto remains hopeful that demand will resurge in the coming year, although similar expectations were voiced last year. In the meantime, negative data continues to pile up, with demand for new homes hitting a record low. The market is facing significant challenges that will require innovative solutions and strategies to navigate successfully.
