SALES COMMENTARY
Throughout July, the Toronto real estate market continued to adjust to current economic conditions. The additional interest rate cut in July clearly wasn’t enough to invigorate activity. As inventory increased, buyers demonstrated that either values need to decrease or more rate reductions are necessary to provide the affordability and confidence to move off the sidelines and re-enter the market.It’s also more prevalent that the present housing market is a tale of two markets, very specific to each neighborhood and property type. Homes are taking slightly longer to sell—up to 36 days on average, compared to 24 days a year earlier—but this is expected in the summer market. While the City of Toronto experienced a year-over-year increase in its average price by 2%, generally throughout the extended GTA, the increased inventory has allowed buyers to benefit. Values in neighborhoods like Brampton decreased by 4%, Mississauga by 1.4%, and Oshawa by 6.4% year-over-year.
GTA MLS SALES
Monthly Time Series with Trend Line
This graph plots Monthly MLS® Sales since January 1994. The blue line shows actual sales. The red line is the trend computed using a 12-month moving average, which exhibits no seasonal variations or other irregular fluctuations. A substantial change in actual sales must occur to change the direction of the trend.
Source: Toronto Regional Real Estate Board
CONDOS
The low-rise and high-rise real estate markets have continued to perform differently, and this trend persisted throughout July. The low-rise market is demonstrating stable ground and improved sentiment and, as such, is receiving the most activity. Townhomes and semi-detached properties experienced year-over-year sales increases of 8.3% and 7.3%, respectively.This has not been the case for the condo real estate market. Inventory levels have risen to numbers not seen in decades, leading to steep declines. New condo prices dipped by 5% from their high, while resale condo prices have corrected by 12% from their peak. In July, there was only a year-over-year average reduction of 2.2%. Over the years, it’s been reported that investors have made up over 70% of the new construction market, primarily in smaller units. They have been instrumental in feeding the space that continues to lack purpose-built rentals. While there is a spike in condo completions, without price appreciation and rental cash flow, condo owners and investors will continue to place more of these units for sale. Interest rates will need to ease faster to keep rent cash flow negative (i.e., rents do not cover ownership costs, including mortgage, condo fees, and property taxes).
TORONTO MLS NEW LISTINGS
Average Toronto Condo Rent
TORONTO MLS NEW LISTINGS
Monthly with Three Previous Years for Comparison
RENTAL COMMENTARY
The rental market has remained stable, with Downtown Toronto continuing to be the most expensive area to rent for both furnished and unfurnished apartments, with unfurnished units averaging $2,399 for a one-bedroom unit, down $29 from last month. Outside of Downtown Toronto, the average for a one-bedroom unfurnished unit is $2,200 per month, a year-over-year drop of $98. Decreasing rental prices in certain areas have provided some relief to tenants.Average Toronto Condo Rent
Q2-2024