The Great Toronto Area (GTA) real estate market remained in a slump in November. Monthly sales reached numbers not seen since 2008, a year in which just 3,640 properties sold in November on the Toronto real estate board.
This year, the market saw 4,236 homes sell in November – 16 per cent more than in 2008. While this gap seems significant, in 2008, the population was 5.309 million. The area’s population is up 20 per cent in the same period, presently 6.372 million. So, when you account for population growth, the per capita sales number is technically worse than one of the lowest months of sales volume experienced during the 2008 recession.
The worst is yet to come
Given that sales typically reach their lowest point in December and January, it’s likely that the real estate market will reach comparable lows to 2008, fulfilling its cyclical bottom in sales volume over the next few months.
While price recovery can take a few years to catch up, volume does usually begin to recover after reaching this bottom, meaning that the real estate industry could expect a much-needed growth in earnings. When looking at the entire year of real estate sales, we will likely finish 2023 with sales numbers as low as in 2001. When looking at population growth since then, there’s a solid chance that we see a record-low number of homes sold per capita.
While the market has been pretty oversupplied in the past while, both new listings and active listings started their typical seasonal downtrend.
It wasn’t enough to move the market balance back toward sellers’ market territory, so the market remains in favour of buyers as we head into the slowest months of the year. Given that new listings and active inventory both also see their lowest levels in December and January, we will likely need to wait until the spring market to determine whether or not we’ll see 2024 fall into buyers’ market or sellers’ market territory.
As expected, this sustained negative state of the market has put downward pressure on house prices in the GTA. All metrics for house prices declined in November, and the market now sits roughly 20 per cent below its 2022 peak values.
Source: Toronto Regional Real Estate Board
Daniel Foch is a real estate broker, working in the real estate industry for over 15 years with various notable organizations such as Interrent REIT, CBRE, and Hydro One. Daniel and his team have transacted over $250M in real estate across a variety of asset classes. During his academic career, Daniel was an active instructor, contributor and researcher in the University of Guelph’s Real Estate Faculty, founder of The University’s International URECC event, and was awarded for affordable housing innovation by CMHC & The University of Guelph during his tenure at the university.
Daniel is a regular contributor in the Canadian media as one of the most trusted, unbiased, and balanced sources of real estate insight. As a result, his real estate expertise has been featured in The Wall Street Journal, CBC, BNN Bloomberg, and The Globe and Mail, among others. Daniel has built a captive audience of over 100,000 real estate investors across multiple social media platforms by providing primary research and market analysis.