Homes For Sale in Toronto: GTA Listings Have Nearly Doubled

Home prices in the Toronto real estate market are higher today than they were a year ago, new local real estate association data show.

According to the Toronto Regional Real Estate Board (TRREB), the average sales price for a residential property in North America’s fourth-largest city rose three per cent year-over-year to just below $1.2 million in September.

The average price for a detached house was above $1.7 million (+8.5 per cent), while a semi-detached home sold for nearly $1.3 million (+5.9 per cent). The average sales price for a townhouse was more than $992,000 (+5.1 per cent), and condominiums were selling for about $732,000 (-4.9 per cent).

At the same time, despite the uptick in prices, sales activity has slowed. In September, home sales tumbled at an annualized pace of 7.1 per cent, totalling 4,642 units.

But why the divergence between home prices and sales? One word: supply.

The State of Supply in the Toronto Real Estate Market

On a year-over-year basis, new listings have skyrocketed more than 44 per cent, totalling 16,258 units, TRREB statistics highlight. Active listings have also soared close to 40 per cent to just under 19,000 units.

Even on a month-over-month seasonally adjusted basis, the number of listings trended upward.

The number of months of inventory also slightly improved from August, rising from 2.4 to 2.5. This is a crucial gauge because it measures the number of months it would take to exhaust current inventories at the present rate of sales activity.

So, here is a breakdown of listings for the four main property categories:

• Detached: 7,465 new listings and 8,439 active listings.
• Semi-Detached: 1,169 new listings and 1,079 active listings.
• Townhome: 1,352 new listings and 1,381 active listings.
• Condo: 1,153 new listings and 1,374 active listings.

“GTA home selling prices remain above the trough experienced early in the first quarter of 2023,” TRREB Chief Market Analyst Jason Mercer said in an industry report. “However, we did experience more balanced market in the summer and early fall, with listings increasing noticeably relative to sales. This suggests that some buyers may benefit from more negotiating power, at least in the short term. This could help offset the impact of high borrowing costs.”

Although there has been an improvement in supply in both the Toronto housing market and the broader Greater Toronto Area (GTA) real estate market, TRREB CEO John DiMichele says that more needs to be done.

“All three levels of government need to be focused on the key issue impacting affordability in the GTA: lack of supply,” he said. “Right now, there continues to be a policy mismatch between population growth through immigration and temporary migration and bringing online enough housing to accommodate this population growth. If we can’t house newcomers, they will look elsewhere, and Canada and the GTA will lose its competitive edge on the global stage.”

New housing construction activity levels have been solid this year, although there was a modest slowdown in August, according to new data from the Canada Mortgage and Housing Corporation (CMHC). Housing starts tumbled nine per cent year-over-year in August, totalling 4,137 units. However, on a year-to-date basis, housing starts advanced 28 per cent compared to the same span a year ago, totalling more than 35,000 units.

Toronto Housing Construction is 10 Years Behind: TRREB

Speaking in a recent interview with BNN Bloomberg, Mercer explained that the GTA housing market is a decade behind in home construction, and the delay in catching up is intensifying the region’s housing shortage.

“We need to see an increase in (home) construction just to offset the deficit that’s built up over the last ten years, and then we’re also seeing record levels of population growth,” he said, adding that demand is unlikely to wane but it could hinder the GTA’s economic growth, particularly if newcomers look elsewhere.

“My concern is that if people start to say, ‘Look, I’d love to move to the Toronto area, but I’m afraid I’m not going to be able to find a home that’s affordable, I might start to look elsewhere,’ and that could be a detriment, not only to the greater Toronto area (GTA) but Canada more broadly,” he said.

Unfortunately, housing affordability is unlikely to improve by a significant amount, says Robert Huge, an assistant chief economist at RBC Economics. This could result in a population outflow in the future, with households looking out west or Atlantic Canada.

On the national stage, Canada needs to build approximately 3.5 million new homes by the end of the decade, projects Aled ab Iorwerth, deputy chief economist with the CMHC. Industry experts concede that the Canadian real estate market is far from close to this figure, something that could add to future price pressures.

“You could see a generation locked out of home ownership in Toronto, Vancouver, Montreal,” said Iorwerth in an interview with CBC.