The spring market is over.
This June, 7,481 homes sold on the Toronto Regional Real Estate Board’s MLS — 16.5 per cent more homes sold than last June.
TRREB’s analysts mention that Toronto’s real estate market posted a relatively strong June market when compared with June 2022. However, June 2022 took place in the middle of one of the largest drops in house prices in Canadian history — so an annualized comparison to that year can be a little problematic.
Generally, total dollar volume of the market has been trending down since last month, which indicates that the spring market is likely behind us.
Source: Daniel Foch
Supply is no longer the story we want it to be
TRREB’s monthly news release indicates that a lack of listings led to tighter market conditions in June, leading the board to urge government to accelerate action on housing supply. On an annualized basis, that statement is correct, but looking at a monthly picture, it becomes evident that supply is actually growing, and it’s breaking the typical seasonal trend by doing so.
Active listings are trending up but still well below the long-term trendline.
Source: Daniel Foch
Usually, active listings roll over and decrease from spring into summer. This year, active listings are continuing to trend up through the end of spring. This will be an important trend to watch heading into the summer market.
Similarly, the number of new listings would be trending down by now in previous years, but this year, it’s still going up monthly in June.
Source: Daniel Foch
Source: Daniel Foch
When examining the long-term context, the monthly jump in new listings has put new supply a little bit above the long-term trendline.
Source: Daniel Foch
Fast and furious
With this being said, absorption was still strong in June, with days on market continuing its downtrend. This means that properties are selling faster than they did last month and almost as fast as the record set last year. If this trend holds, there is little risk of inventory piling up too quickly to push the market into buyer’s market territory, but it’s worth keeping an eye on these data points.
Source: Daniel Foch
Price plateau
Every year in Toronto real estate, average and median sale prices rise from January until the peak of the spring market due to seasonality. When the spring market is over, these price metrics typically fall until August and then jump up in September. This rollover took place in May this year, signalling that pricing supports the end of the spring market, just as volume does.
Source: Daniel Foch
Similarly, the sale-to-list price ratio for TRREB has also tapped out its seasonal cycle, plateauing around 105% and likely headed down into the slower summer. This means that although demand is strong, the expectations of buyers and sellers are beginning to diverge.
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.
