Toronto Real Estate Market Was Freezing Cold in May
Overview of important developments in the Toronto Metro housing market and macro reported in May 2024
Highlights
The Toronto Metro resale market softened further, entering a buyer’s market state in May.
Condos remain weaker than the overall market, with condo resale inventory reaching an all-time high.
The Toronto Metro rental market was the weakest since at least 2012.
Supply and Demand data for Toronto Metro can explain rental market dynamics.
Housing starts are declining in Toronto Metro and expected to continue, impacting construction employment.
Toronto Metro housing completions in the last 12 months were the highest ever recorded.
Q1 inputs in population growth remain strong, with no signs of slowdown yet.
The Financial Stability Report highlighted several important risks.
Toronto Metro’s unemployment rate increased to the highest level since 2014.
Real Estate Market
In May, the Toronto Metro real estate market continued weakening. It experienced a decline in sales, new listings, and an increase in active inventory compared to the 10-year average.
Examining May’s data in isolation reveals several notable records, including one of the lowest sales outside of the pandemic and the highest active inventory since 2013. However, a more careful analysis makes these records less relevant. For instance, seasonally adjusted active inventory was below last year’s high and its level was quite typical.
A similar pattern is seen in market balance indicators. May’s readings for Months of Inventory and Sales-to-New Listings were the weakest for that month since at least 2006. However, after seasonal adjustment, both were stronger than last year’s lows. Therefore, while the market continued to weaken in May, the process was gradual. Toronto Metro can be considered as a buyer’s market now.
Despite the weak market balance, prices appeared stable, with average and median prices increasing in May, while benchmark and adjusted average prices declined.
However, this apparent stability is misleading. The increase in average and median
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