Toronto, Ontario, November 3, 2022 - The Toronto Regional Real Estate Board this morning released residential MLS® stats for October, 2022, showing a continued moderation of the record pace of home sales seen over the past couple of years “plus” in Metropolitan Toronto, the GTA / Greater Toronto Area, and the Greater Golden Horseshoe region of South-Central Ontario.
Overall - “The Big Picture”
Accounting for all Toronto Regional Real Estate Board areas and all home types & styles, 9,768 sales were 4,961 units sold reported on the month, down 49.1% from last October's adjusted total of 9,743 sales. Overall, the average selling price came in at $1,089,428, down 5.7% from the year-earlier period. All statistics quoted herein are year-over-year comparisons unless specifically noted otherwise.
Specific Numbers by Home Type
In Metro Toronto proper, 599 homes changed hands in the Detached group, down 43.3%, at an average sale price of $1,609,077, down 9.9%. The remainder of TRREB’s market area saw 1,701 Detached homes reported sold, down 46.9%, averaging $1,289,107, down 11.8%.
Condominium Apartments sales in Metro Toronto - “The Big Smoke” - totalled 888 in October, down 53.5%, at an average selling price of $740,374 which was unchanged YoY. The rest of the area - “The 905" (area code), generally speaking - had 450 Condo Apartment sales, down 54.2%, at an average $669,434, up 5.7% which was the sole “plus sign” in the report aside from the Inventory & “Days on Market” numbers.
No question it was a helluva run for the residential real estate market, but there was no way - as we’ve said here many times before - that that run-up was sustainable… particularly taking into account the historically low interest rate environment we became - perhaps - a little too used to. For a good, graphic impression of home prices over the past several decades, see the chart at the very bottom! ??
“New Listings” were actually down on the month by 11.6% to 10,390 homes.
But, in the face of high prices and interest rates - among other factors - combining to moderate (significantly) the sales volume as noted above the more relevant “Total Active Listings” (TAL) figure came in at 13,023 which represented a 68.1% spike from a year ago.
Total Active Listings of 13,023 divided by the month’s sales total of 4,961 results in an “Indicated Forward Inventory" - the time it would take to sell all existing inventory given a constant rate of sales - of 2.63 months. That’s ‘way more in line with historical norms than the “recent normal” tight inventory situation that’s persisted for years.
Not surprisingly, homes sold "61.5% solwer" than last October at an average of 21 days on the market [“DOM”] compared to just 13 days one year ago. It should be noted that the current “Days on Market” of 21 is still very fast by historical norms which may reflect the fact that properly priced homes in desirable areas are snapped up quickly while sellers resisting the shift in the market in hopes of getting “yesterday’s prices” end up sitting on the market.
Naturally, home styles also play a part here: Bungalows all across the market area remain in high demand and relatively short supply.
TRREB’s Director of Market Analysis, Jason Mercer: “Home prices in the GTA have found support in recent months because price declines in the spring and summer mitigated the impact of higher borrowing costs on average monthly mortgage payments. The Bank of Canada’s most recent messaging suggests that they are reaching the end of their tightening cycle. Bond yields dipped as a result, suggesting that fixed mortgage rates may trend lower moving forward, which would help affordability.”
TRREB President Kevin Crigger: “With new listings at or near historic lows, a moderate uptick in demand from current levels would result in a noticeable tightening in the resale housing market in short order. Obviously, there is still a lot of short-term economic uncertainty. In the medium-to-long-term, however, the demand for housing will rebound. Public policy initiatives like the recently introduced provincial More Homes Built Faster Act and strong mayor provisions will help ensure we see more homes being built to affordably meet the needs of new households“With new listings at or near historic lows, a moderate uptick in demand from current levels would result in a noticeable tightening in the resale housing market in short order. Obviously, there is still a lot of short-term economic uncertainty. In the medium-to-long-term, however, the demand for housing will rebound. Public policy initiatives like the recently introduced provincial More Homes Built Faster Act and strong mayor provisions will help ensure we see more homes being built to affordably meet the needs of new households."
The “More Homes Built Faster Act” - Bill 23” - is the Doug Ford Provincial Government’s contribution to solving the home inventory problem. Unfortunately, “better late than never” probably doesn’t apply here: Clearly market forces - as they always do - already “solved the problem”. On top of that, many - including environmental groups - are cautioning that the Ford legislation “will directly impact conservation authorities and their ability to provide science-based watershed advice for the purpose of protecting communities from environmental hazards and preserving vulnerable ecosystems and valuable public green spaces.”
On top of that, Ontario has increased the “NRST” - Non-Resident Speculation Tax - to 25% of the home purchase price, up from 20%. Hmmm…
As always, thank-you very much for stopping by! Enjoy the beautiful fall weather… and, as always, drop a line anytime with your comments, questions, real estate-related needs…
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