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Toronto Market Report June | July 2020


Toronto Market Report | According to Covid-19

1. The GTA market has been driven over the past 15 years by in-migration (from other parts of Canada and from non-residents) at a rate of 100,000 people per year. This has required about 40,000 new housing units each year. We have always delivered under 40,000 units a year and this shortfall has created a market of rising prices for all properties. Since March, this inflow has been cut-off. Canada has ceiled its borders and inter-provincial migration has also ended.

2. The GTA also attracts 100,000 non-resident students who attend post-secondary schools each year and they also will not be requiring rental accommodation this year.

3. Social distancing has also forced most office employees to work from home instead of the office. Many who feel this move will be permanent have decided to look for accommodation farther afield. The strongest real estate markets in Ontario over these last few months are those with commute times to downtown Toronto of 60-90 minutes one way.

4. So, when will the market revert to pre-covid-19 levels? We need a VACCINE to make Toronto desirable again – restaurants, entertainment, sports, and short commutes to work. Our guess is that the vaccine will be widely available in 12 months.

5. Most major cities are experiencing similar problems to Toronto. Still, Toronto remains an attractive destination for people and investors going forward. For those who remember Sars, it created a three month pause in the market. This pause promises to be about 12-15 months.

Sales Commentary


On the surface, sales declined 53% this May from May of 2019 to 4606 units. The number should be in the 9-10,000 range. On a positive note, sales are up over 50% from April. This is one trend we need to follow in the coming months.

If sales are down by half, why are real estate prices not falling? In most markets when sales drop significantly, prices usually come down. But in Real Estate, price changes are reflected by the ratio between sales and ‘new listings’ over the same period – in this case May. A balanced market has a ratio of 40-60%.

‘Active listings’ are an indication of the long-term direction of prices. Active listings equal to a six-month supply at current sale rates suggest that prices will begin to soften in the future.

For TRREB as a whole, (the GTA), both sales and new listings declined by the same amount this May over last. In terms of price movements, you should see the same activity as last year. The sale-to new list ratio is currently at 50%. With active listings also down to a 2.4-month supply, we expect prices to increase in the low-rise (freehold) market this fall because of this low inventory and the premium now being placed on backyards! See Table 1.

For the Downtown and Humber Bay condo markets, sales were also lower by 50% in May versus May of 2019. However, the sale-to new list ratio is now at 34% which is starting to favour buyers. While prices have not yet declined, just look at the ‘Active Listings’ number. It is 5% higher than a year ago, unlike the overall market. Prices will start to decline in 2021. For people looking to buy, mortgage rates will only be higher a year from now so there may not be much savings in waiting. See Table 2 below.

For the period June 1-16, sales were 235 units versus 182 for the same period in May. That represents a 29% increase. Still it is only 60% of the sales recorded for 2019 for the same period.

TRREB: MAY 2020 VS MAY 2019

TRREB-MAY 2020 VS MAY 2019

Table 1: This chart compared May 2020 and May 2019 in regards to TRREB sales, new listings and active listings. We can see that the % change is negative for all three categories. Source: Toronto Real Estate Board



Table 2: *Downtown is the TRREB areas C01+C08 (south of Bloor, & DVP to Dufferin) Humber Bay is the TRREB areas W01 + W06 (south of QEW, & Humber River to Browns Line). Again,  sales and new listings have a negative % change but active listings have gone up!. Source: Toronto Real Estate board



Figure 1:  This graph compares GTA showings from week June 1st – 7th with showings from week June 8th – 14th. Numbers have declined with the peak on Friday but plummets during the weekend. Source: Toronto Real Estate Board

Rental Commentary

The rental market is the weakest market in the GTA. Rents have already started to decline by $100 to $250 per month across all bedroom types. While the number of leases is only down 16%, the ‘new’ listings and ‘active’ listings are up by over 40%. The challenge for landlords is a lack of new tenants. Because of travel restrictions, there are fewer non-resident students coming to the GTA and there are no corporate transfers happening. This has created a market where the units leased to new listings is down to 39%. There is also a 3.5 months’ supply of active listings which is abnormal, given that properties are always leased within 60 days. See Table 3 below.

Those Landlords who are now looking at negative cash flows from reducing rents, should be aware that rent controls exist in Ontario and that it is not automatic that you can increase rents back to previous levels next year. Selling now, rather than holding may be your best strategy.


Table 3:  *Downtown is the TRREB areas C01+C08 (south of Bloor, & DVP to Dufferin) Humber Bay is the TRREB areas W01 + W06 (south of QEW, & Humber River to Browns Line). We can see that new listings and active sales have changed close to 50%. However, sales have been negatively impacted. Source: Toronto Real Estate Board

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