Toronto Real Estate

MARKET REPORT OCTOBER 2023

Sales Summary

Sales on the Toronto Real Estate Board continued their downward trend. In September there were just 4,642 sales – 7.1% lower than last September and 12.1% lower than August. This market is in serious trouble.

Last month we said prices (which have been supported by a lack of listings) are about to drop further. Well here comes all the new listings as predicted – 44% higher than September a year ago. Active listings are now 40% higher than this time last year as well. For the last two months our favourite graph has been the sale-to-new listings ratio. It is now sitting at 28.5%. Clearly, we are in a ‘buyers’ market.

The Downtown and Humber Bay condo markets are even in worse shape. The assumption that buyers would shift to cheaper housing does not appear to be true. The sale-to-new listing ratio in this market is 20.4%.

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The Myth About Average Prices

We previously talked about Average Prices in our July issue to show the impact of seasonality. Average Prices are used in real estate because the public understands the term and believe this number reflects what is happening in the market. When you compare Average Prices between different periods, the assumption again is that the ‘mix’ of sales does not change. This time we looked at Average Prices in September of 2023 versus September of 2022.The Table shows that Average Prices were impacted by more sales over two million dollars, than by any increase in overall house prices.

Perpetuating the use of Average Prices means that sellers are being unrealistic about pricing their property for sale. As the Fall continues, we are going to see more sellers chasing the market downwards. Be prepared to endure these interest rates for another twelve months. If you must sell, price aggressively at the outset. If you don’t need to sell, take your property off the market.

RENTAL COMMENTARY

We have passed the peak of the rental market. The number of condos available for lease is now almost 2500. The number leased was 1534 in September. In August, we leased over 2500 units and availability was at 1800 units. In July 2900 units were leased (the market peak). As a result, multiple offers have decreased.
The initial list price to sale/lease price is now sitting at 100% for all bedroom types. Rental prices remained unchanged from last month. Based on the current level of incomes for tenants, it would appear that we have reached maximum rents.

The table below represents average rents by bedroom type for September. Extras for parking ($300) and a second bathroom ($500) per month are still the norm.