Greater Toronto real estate agents have been dropping anecdotal evidence the market is firming. It might be true, according to the latest composite benchmark prices presented by the Toronto Regional Real Estate Board (TRREB). Home prices generally fell across the region, except in the most dense part—the actual City of Toronto. In the City, the price of a typical home actually climbed. One month isn’t enough to declare that a trend has changed, but it likely has the central bank sweating bullets.

Greater Toronto Real Estate Prices Fell, Just Not In The City

Greater Toronto real estate prices seem to have found a floor in some regions. The TRREB-wide composite benchmark fell 0.2% (-$2,500) to $1,078,900 in January. However, in the City of Toronto, the benchmark price climbed by 0.5% (+$5,100) to reach $1,067,000 in the month. While one month doesn’t make a trend, the data comes after Oakville-Milton single-family homes made a big jump higher in December. Not exactly the cooling expectations the Bank of Canada (BoC) had in mind for the market when it announced a pause.

Greater Toronto Real Estate Are Off The Peak

The composite benchmark price of a home across Greater Toronto.

Jan 2005Jan 2006Jan 2007Jan 2008Jan 2009Jan 2010Jan 2011Jan 2012Jan 2013Jan 2014Jan 2015Jan 2016Jan 2017Jan 2018Jan 2019Jan 2020Jan 2021Jan 2022Jan 2023C$0C$200,000C$400,000C$600,000C$800,000C$1,000,000C$1,200,000

Date	Canadian Dollars
Jan 2005	316,400
Feb 2005	325,400
Mar 2005	318,700
Apr 2005	328,400
May 2005	334,200
Jun 2005	336,100
Jul 2005	332,900
Aug 2005	333,500
Sep 2005	335,100
Oct 2005	336,400
Nov 2005	338,800
Dec 2005	335,700
Jan 2006	339,800
Feb 2006	342,900
Mar 2006	346,700
Apr 2006	350,600
May 2006	352,200
Jun 2006	352,400
Jul 2006	350,300
Aug 2006	349,800
Sep 2006	351,800
Oct 2006	350,600
Nov 2006	350,400
Dec 2006	348,100
Jan 2007	350,000
Feb 2007	356,900
Mar 2007	360,900
Apr 2007	365,300
May 2007	368,700
Jun 2007	371,700
Jul 2007	372,100
Aug 2007	373,600
Sep 2007	376,000
Oct 2007	378,000
Nov 2007	378,300
Dec 2007	377,400
Jan 2008	380,500
Feb 2008	383,100
Mar 2008	383,600
Apr 2008	385,000
May 2008	384,300
Jun 2008	382,700
Jul 2008	379,100
Aug 2008	377,200
Sep 2008	375,300
Oct 2008	371,000
Nov 2008	365,900
Dec 2008	358,000
Jan 2009	353,300
Feb 2009	352,100
Mar 2009	354,500
Apr 2009	359,200
May 2009	365,300
Jun 2009	372,000
Jul 2009	377,200
Aug 2009	383,100
Sep 2009	388,900
Oct 2009	394,300
Nov 2009	398,300
Dec 2009	399,600
Jan 2010	404,900
Feb 2010	411,700
Mar 2010	415,200
Apr 2010	416,800
May 2010	416,100
Jun 2010	414,300
Jul 2010	410,800
Aug 2010	410,600
Sep 2010	411,100
Oct 2010	411,600
Nov 2010	412,500
Dec 2010	411,700
Jan 2011	417,300
Feb 2011	424,500
Mar 2011	430,300
Apr 2011	435,900
May 2011	440,100
Jun 2011	443,400
Jul 2011	444,400
Aug 2011	446,600
Sep 2011	448,600
Oct 2011	450,000
Nov 2011	452,000
Dec 2011	453,400
Jan 2012	457,900
Feb 2012	465,900
Mar 2012	472,200
Apr 2012	478,100
May 2012	481,200
Jun 2012	480,700
Jul 2012	479,100
Aug 2012	476,300
Sep 2012	477,100
Oct 2012	476,100
Nov 2012	472,700
Dec 2012	474,800
Jan 2013	474,500
Feb 2013	482,700
Mar 2013	488,400
Apr 2013	493,800
May 2013	497,300
Jun 2013	498,200
Jul 2013	498,500
Aug 2013	499,300
Sep 2013	501,200
Oct 2013	504,400
Nov 2013	505,600
Dec 2013	506,400
Jan 2014	512,400
Feb 2014	521,800
Mar 2014	527,700
Apr 2014	533,900
May 2014	537,300
Jun 2014	539,900
Jul 2014	539,700
Aug 2014	540,500
Sep 2014	543,500
Oct 2014	545,900
Nov 2014	547,300
Dec 2014	548,200
Jan 2015	553,500
Feb 2015	564,300
Mar 2015	574,400
Apr 2015	583,000
May 2015	588,200
Jun 2015	592,800
Jul 2015	594,600
Aug 2015	597,400
Sep 2015	601,600
Oct 2015	602,700
Nov 2015	603,600
Dec 2015	605,900
Jan 2016	616,500
Feb 2016	631,600
Mar 2016	646,400
Apr 2016	665,000
May 2016	680,500
Jun 2016	692,000
Jul 2016	698,100
Aug 2016	706,600
Sep 2016	716,800
Oct 2016	724,700
Nov 2016	728,900
Dec 2016	735,700
Jan 2017	759,800
Feb 2017	804,500
Mar 2017	851,000
Apr 2017	865,500
May 2017	849,300
Jun 2017	822,400
Jul 2017	793,700
Aug 2017	774,600
Sep 2017	769,800
Oct 2017	766,200
Nov 2017	761,100
Dec 2017	756,600
Jan 2018	758,600
Feb 2018	764,200
Mar 2018	771,500
Apr 2018	775,800
May 2018	774,200
Jun 2018	771,700
Jul 2018	768,100
Aug 2018	764,000
Sep 2018	766,800
Oct 2018	767,300
Nov 2018	761,500
Dec 2018	756,300
Jan 2019	755,700
Feb 2019	763,200
Mar 2019	771,500
Apr 2019	776,400
May 2019	779,500
Jun 2019	779,600
Jul 2019	779,700
Aug 2019	779,200
Sep 2019	783,100
Oct 2019	787,700
Nov 2019	790,100
Dec 2019	792,500
Jan 2020	806,000
Feb 2020	830,600
Mar 2020	845,000
Apr 2020	832,100
May 2020	837,100
Jun 2020	842,400
Jul 2020	857,300
Aug 2020	869,900
Sep 2020	875,200
Oct 2020	877,000
Nov 2020	883,900
Dec 2020	893,800
Jan 2021	927,500
Feb 2021	970,100
Mar 2021	998,900
Apr 2021	1,010,900
May 2021	1,018,500
Jun 2021	1,021,900
Jul 2021	1,025,100
Aug 2021	1,033,200
Sep 2021	1,065,300
Oct 2021	1,113,100
Nov 2021	1,153,000
Dec 2021	1,187,200
Jan 2022	1,257,500
Feb 2022	1,326,100
Mar 2022	1,335,000
Apr 2022	1,303,900
May 2022	1,261,800
Jun 2022	1,204,900
Jul 2022	1,157,500
Aug 2022	1,124,600
Sep 2022	1,110,700
Oct 2022	1,098,200
Nov 2022	1,089,800
Dec 2022	1,081,400
Jan 2023	1,078,900

Source: TRREB; Better Dwelling.

Greater Toronto Real Estate Prices Are Still Down Significantly

Might not want to read too much into a single-month increase with prices still down significantly from last year. TRREB home prices are down 14.2% (-$178,400) from a year ago, while the City of Toronto is 10.2% (-$120,700) lower. For those curious, the rate of decline is still decelerating despite the month’s increase due to a base effect. Prices in January failed to rise as much as last year.

Greater Toronto Real Estate Price Growth Is Decelerating

The 12-month percent change for the composite benchmark price of a home across Greater Toronto.

Source: TRREB; Better Dwelling.

Greater Toronto Home Sales Had The Worst January Since 2009 

Greater Toronto residential real estate sales through the MLS are getting weaker. Sales across TRREB fell 44.6% to 3,100 homes in January. Being roughly cut in half is as bad as it sounds, it was the fewest homes sold since 2009.

Greater Toronto Real Estate Sales

The number of existing-homes sold across Greater Toronto through the TRREB, the local real estate board.  

Source: TRREB; Better Dwelling.

Greater Toronto Inventory More Than Doubled, “Balanced”

At the same time, inventory pressures are still releasing. The number of active listings for sale jumped 124.6% to 9,299 homes in January. New listings showed a mild drop of 3.7%, and fell to 7,688 units over the same period. However, the drop was much smaller than that of sales, meaning less pressure on prices.

The result is the sales to new listings ratio (SNLR) is MUCH lower than last year. This is the indicator that determines if a market is a “buyers” or “sellers” market. The SNLR fell from 70% this time last year to 40% last month. That’s right, at the cusp of the 40%-to-60% range where the ratio is considered balanced, and priced right for the market.

So what’s happening? Once again, one month doesn’t make a trend, but there’s a few conditions that may be attracting buyers. The interest rate on a 5-year fixed rate mortgage is falling, meaning the market expects interest rates to fall relatively soon. At the same time, the Bank of Canada (BoC) is signaling the end of rate hikes, leading many antsy buyers to see this as close to the bottom.

The softening expectations are likely to be a big concern for the BoC in the coming months. Rising rates were supposed to throttle expectations for 18 to 24 months. Now with the general public reading into every move the central bank makes, their expectations are softening before inflation issues have been resolved. If it wasn’t just an anomaly, the BoC has a big problem on its hands.

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