Toronto Real Estate: A New Era for Buyers Emerges

We are witnessing a significant shift in Toronto's real estate landscape as it enters a buyer's market for the first time in decades. October brought forth a 5.8% decline in sales compared to the same period last year, marking one of the lowest October home sales figures in history.

Accompanying this decline in sales is a substantial increase in inventory, with monthly new listings soaring by 38% from the previous year. Active listings have surged by 50.1% since October 2022, indicating a market where supply is outstripping demand, leading sellers to leave their listings on the market. This combined trend of growing supply and diminishing demand has firmly placed Toronto in buyer's market territory, a shift discerned through metrics such as months of inventory and the sales-to-new-listings ratio.

Interestingly, amidst this shift, house prices have remained relatively stable, hovering above the long-term trendline. This stability suggests that, at least for now, buyers have not significantly influenced the price discovery process in Toronto's real estate market as it heads into the slower winter months.

Speculating on the future, it remains to be seen whether the market will continue to trade sideways or eventually return to the long-term trendline. Historical context is brought into focus, with a comparison to the last major housing cycle in Canadian real estate during the 1990s, which resulted in a sideways market for 2-3 years after reaching the "bottom."

As we navigate these changes, we are eager to hear your thoughts. Do you believe the Toronto market will follow a similar trajectory as the early 1990s? Please share your insights and predictions by responding to this newsletter – we value your perspective!

Michael Simone

Source: The Real Estate Magazine