July’s market data has unveiled a rare window of opportunity for Toronto real estate investors.
With a surge in inventory, price resilience in key sectors, and recent policy shifts, the Toronto real estate landscape is primed for strategic moves. Let’s dive into the numbers and trends!
Sales and Listings: A Deeper Buyer's Market
The headline numbers show a modest 3% increase in sales compared to last year.
However, the real story lies in the surge of new listings, which have jumped by an impressive 19%. This significant outpacing of sales growth by new inventory is creating more choices for buyers and clearly indicates we’ve entered a buyer’s market.
| Jul 2023 | Jul 2024 | Change | |
|---|---|---|---|
| Average Price | $1,117,671 | $1,106,617 | -1% |
| Sales | 5,229 | 5,391 | +3% |
| New Listings | 13,719 | 16,296 | +19% |
| SNLR | 38% | 33% | -13% |
Segment Analysis: Condos Buck the Trend
Even though the Toronto condo market shows weaker indicators, condo prices haven’t dropped as much as they have in the freehold market in the past few months (yet).
| May 2024 | Jul 2024 | Change | |
|---|---|---|---|
| Average Price | $1,165,691 | $1,106,617 | -5% |
| 416 Detached | $1,826,370 | $1,648,021 | -10% |
| 416 Semi | $1,416,496 | $1,254,280 | -11% |
| 416 Condo | $767,064 | $748,330 | -2% |
However, the weak buyer’s market and highly negative cash flows for investors are worrying signs that the condo market might be heading into a recession.
This could be tough to bounce back from, and it raises questions about how long investor-owners can hold out under these conditions.
Understanding Toronto Real Estate Market Dynamics Through the SNLR
The sales-to-new-listings ratio (SNLR) helps gauge market balance.
With more Toronto homes being listed than sold, the balance between supply and demand in the Toronto housing market stays steady, shown by the SNLR.
- Seller’s Market (SNLR above dotted line): Demand exceeds supply, leading to competition among buyers and price increases.
- Buyer’s Market (SNLR below dotted line): Oversupply gives buyers negotiating power and may result in lower prices.
- Balanced Market (SNLR at dotted line): Supply and demand are in equilibrium, leading to stable prices at around 60% in the Toronto real estate market.
Recent Policy Changes and Their Impact
Several recent developments could influence the market’s direction in the coming months:
- Bank of Canada Rate Cuts: The June and July rate cuts by the Bank of Canada may be starting to positively impact the market. As the current inventory is absorbed, we could see market conditions tighten, potentially leading to price growth.
- Toronto City Council Considerations: The council is mulling over the adoption of single egress stair requirements for multi-residential buildings up to four storeys. This could have more positive implications for the Toronto freehold space moving forward.
- Crosstown LRT Progress: Advancements in the Crosstown LRT project continue to be a significant factor in housing development and neighbourhood desirability along its route.
How We Can Help
As we move further into the summer and fall, it will be crucial to keep an eye on how these factors play out. The condo market, in particular, deserves close attention if the potential recession in this segment deepens.
For buyers, this may be a good time to explore options in the freehold market, where prices have adjusted more. Sellers, especially in the condo market, may need to rethink their expectations and strategies given the current conditions.
We’ll continue to monitor these trends closely and provide updates as the market evolves. At our Toronto real estate brokerage, we specialize in helping investors navigate these challenges. Whether you’re looking to sell your Toronto condo, buy a turnkey Toronto multiplex, or turn single-family homes into multiplexes in Toronto, we can guide you through the process.
Here’s what we offer: personalized advice to understand your goals, tips to spot good investments, and connections to reliable contractors for renovations. Plus, if you want, we can manage your property and find tenants for you.
Ready to explore your options? Click the button below to get in touch with us today!
