The Toronto Real Estate Market is taking a dip. We looked at the recent stats and analyzed what that means for buyers and sellers. Sales in Toronto for October matched those of this past September and August. When you consider the normal seasonality of the market, our guess is that we have reached the bottom of the sales cycle. This represents a 49% drop in sales compared to the same month in 2021.
Toronto real estate prices are a different matter. All property types have given back all the gains made earlier in the year. We are back to 2020 prices! However, in order to determine which markets are most susceptible to further price decreases you should look at ‘new’ listings versus sales. For the overall Toronto real estate market, new listings are down 12% from October of last year (2021). (It is true that ‘active’ listings are higher than a year ago but many of these properties are with sellers who will not reduce their price or are in need of upgrades). In today’s market, buyers are only interested in newly renovated properties. Fixer-Uppers have fallen out of favour.
When determining the state of the real estate market, we always like to look at the Sales-To-New Listings Ratio (sales divided by new listings). Anything below 40% is a buyer’s market. A balanced market is 40-60%, and anything above 60% is a seller's market. Toronto has been almost consistently a Seller's market for the past 10 years until recently. The numbers in the graph below suggest we can probably expect a 1-2% price drop over the winter. Downtown Toronto condos are the most susceptible market due to new condo projects sold in previous years now coming into the resale market.