There were 6896 sales in March on The Toronto Regional Real Estate Board. The month-to-month increase was 45% versus just 20% in 2022. This confirmed what we said at the start of the year. Sales had bottomed out in January and the monthly market peak would exceed 7500 sales. Only 10% of respondents agreed with this forecast. Most said sales would peak at just 5,000. It now looks like the monthly peak will exceed 8,000 units. So what is slowing sales growth? It is not a lack of buyers but a lack of new listings.
Prices also began to increase in February (the price bottom) and by mid-April were up about 3%. Price increases can be attributed to two factors. First, new listings are at 10-year lows. Secondly, we have seen the Bank of Canada pause rate increases for the second time. We have always maintained that ‘rate certainty’ is just as important as the actual level of rates. Given time, consumers can adjust. We had strong sales and price growth in the eighties with much higher mortgage rate levels than the 4.5% to 5.5% today.
By May, you will see year-over-year monthly increases in sales. By June, you will see year-over-year increases in real estate prices. What will we talk about then?
TORONTO AVERAGE CONDO PRICES
DOWNTOWN VS HUMBER BAY SHORES
This month we compared average condo prices for Downtown versus Humber Bay.
While average prices are lower in Humber Bay, here is what you need to know. Humber Bay units are larger and most have parking included. Outdoor space is better too. The drawback is poor public transportation to Downtown. With real estate there are always trade offs.
Toronto MLS® New Listings
Monthly with 3 Previous Years for Comparison
The below chart plots Monthly MLS® New Listings for the current year and the previous three years. The recurring seasonal trend can be examined along with comparisons to previous years for each month
Source: Toronto Regional Real Estate Blog
Our commentary is focused on just the Downtown and Humber Bay markets for rentals. In February there were just under 1400 units leased. For March, 2061 units were leased – an increase of 51%. This increase signifies the real start to the 2023 rental market. The good news for potential tenants is that there are still over 1800 units available for lease, and more are coming. As well, rental rates have started to plateau after rising by over 10% in the last year. Landlords are particularly aware about incomes of tenants and what they can afford to pay.