September Toronto Real Estate Market Update
Hello and Happy October! How was your September? For me, it feels like summer was five months ago. A distant warm memory, now replaced with fallen leaves, sweater weather, Halloween decorations, and a very encouraging start to the Fall Real Estate Market?
The Toronto Real Estate Board recently released the statistics for September, and depending on what type of property you own or are looking to own, this month was very telling for what I believe will be the future trends from now until 2025.
Before discussing the statistics, we can’t forget to mention the news and announcements about the Canadian Government's future plans unveiled this month. We had another .25 interest rate drop, followed by an announcement that CMHC was increasing the insurance cap from $1 million to $1.5 million and extending amortization from 25 to 30 years come December.
This is only positive news. It intends to reactivate buyers and help kick-start the real estate market after a few months of sluggish activity.
Will it work? Time will tell, but already, September saw a boost in sales for Semi-Detached Freehold homes and an average price increase across four out of five property types.
This also helped spur sellers to list again. We saw a massive increase across the board, as sellers felt confident there was a market for their property. Buyers benefitted from this huge supply increase with essentially more options to select from.
So…. ARE WE BACK?!?
Okay, we are not officially back—let’s nip that right away—but we are getting there!
Freehold homes are in a good position to bounce back, and this month, they have already started the comeback. This month saw a return of offer nights, and I was involved in a highly competitive one with 14 offers. My clients really wanted the home, but so did a slew of others, and after two rounds, conditions waived, we still missed out and finished in the top 3. In case you’re wondering, The highest bid was $120,000 over listing. Oh, and we presented in person in front of the sellers - ala the good old days pre-covid style.
Unfortunately, condo owners are still status quo, and frankly, unless you get aggressive with your pricing, there is way too much supply out there and not enough demand. Unless you have a truly unique space, like a hard loft or large outdoor space, you need to stand out from the crowd, and the only way to do so is with pricing and by essentially under cutting your competition/fellow neighbours. Unless a major interest rate drop occurs, I do not expect anything to change before 2025. Sellers are holding firm on their prices and buyers are not interested in what has proven to be an overvalued and volatile property type. Here's an interesting stat that came out last week :
Listen, after dealing with the summer we had and having to put out these blogs of nonstop negative numbers and nothing newsworthy to signify a potential turnaround (until last month), your guy is feeling the sun on his skin again; he can see the light, the birds are chirping, and I’m feeling good about the direction we are heading in. I’m feeling….balanced. Yes, my friends, balance. This a word not thrown around very lightly in our fair city’s real estate market, but with sales and prices up for sellers, and listings up for buyers and many great opportunities to negotiate favourable terms, there is a balance…. For now.
You've read my personal opinion, but now here are the cold, hard facts.
Please note that these statistics cover only the City of Toronto. Not Richmond Hill, Not Mississauga, Not Vaughan, etc. If you would like to know what's happening in another area in GTA, please reach out and let me know. I'm happy to chat!
Want to look on your own and see the numbers for yourself? Click Here to view the official statistics that every Real Estate gets sent from TREB and uses for their market updates. These are the exact numbers I use for my Toronto updates and if you want, I can prepare an update as detailed as this blog update for your city, neighbourhood and even street.
Don't be shy, reach out and just ask!
So without further ado, let's take a look at the September Statistics with the charts and breakdown below ⤵️
So I guess all those jokes about the Toronto Real Estate Market taking the summer off really had a little truth in them, eh?
July and August were the quintessential dog days of summer, and if you read this blog, you'll know that I was on my soapbox yelling to the streets that this is normal. This is summer real estate in Toronto. DO NOT PANIC. Don't buy into the mania of the media. Come September, when the summer break is over, the kids are back to school, and work and city life take over again, things will start to get better.
So why does a huge number of new listings hitting the market in one month signify a positive change? Keep in mind that it's one piece of information, one piece of a larger puzzle, but it still tells us something.
To me, it shows that sellers feel confident and excited to list and sell their homes. Why? Maybe the continued rate drops (and more on the way)? Perhaps the recent announcements aimed toward buyers? It could be the time of the year with summer now over and the historically busy Fall Market upon us. Or maybe, just maybe, some sellers are feeling a financial pinch and cutting the cord while news is rampant and agents, and media are spreading home buyer FOMO.
Or it could be a combination of everything...We can never really know, but we do know that sellers are testing the market again.
For buyers, it's straightforward. You have a ton of options now, and there is not that much competition at the moment. That's a great 1 - 2 combo to land your dream home!
Looking at those options, specifically,
Detached homes went from 946 new listings to 2108, a 122.83% increase.
Semi-Detached went from 246 to 528, a 114.63% increase.
Freehold Townhomes went from 105 to 234, a 122.86% increase.
Condo Townhomes went from 297 to 454, a 52.86% increase.
Condo Apartments went from 22564 to 3707, a 44.58% increase.
Key Takeaway - New listings and the sellers from the summer who took their homes off the market are back, and with the interest rate drops and insurance rate increases ($1.5million), this will only help to continue the market shift into not dead, not on fire, but just balanced.
Balanced for now, but what about after two more rate drops and then on Dec. 15th when the new mortgage insurance cap increases?
Will that be the spark that sets the market on fire again? Time will tell...
Condos, I haven't forgotten about you. Overpriced, small and frankly, cheaply built new condos will continue to struggle a little bit more. The value just isn't there, and there are too many. Sorry to all the investors, but with the government deciding to slow down immigration and specifically International students (a massive rental demographic), population growth will not fuel the need for immediate housing.
After a few double takes, a sip of coffee, and a deep breath, I still couldn't wrap my head around this stat. Here’s the deal: 3 out of the 5 property types saw a whopping +100% increase in new listings. But when I checked the active listings, they had only increased by less than 50% from August. That's a big gap, and it's got me scratching my head.
Now, let's talk about the other two home types, Condo APT & TH. They saw increases of 44% and 52% in new listings, but this only led to an overall increase of 7.88% and 17.7% in listings. So, what's the deal here?
Specifically,
Detached homes went from 1809 to 2413, a 33.39% increase.
Semi-Detached went from 353 to 525, a 48.73% increase.
Freehold Townhomes went from 192 to 254, a 32.29% increase.
Condo Townhomes went from 548 to 645, a 17.7% increase.
Condo Apartments went from 5672 to 6119, a 7.88% increase.
Key Takeaway - Seems a little off, doesn't it? Consider this stat one piece of the puzzle. It's a fascinating piece, yes, but still just one piece. The other four pieces combine to give us a clearer picture of what is actually happening (or at least we try to make sense of them). Still, right off the bat, if I see new listings explode and then active listings trail substantially behind, my spidey sense tells me those homes are either being sold or taken off the market by the sellers. Speaking of sales...
Ok, ok, now this is what we are talking about it! Freehold home owners are back smiling, and buyers wanting a detached or semi detached are not wasting any time.
We always knew the buyers were waiting & watching, but now a certain demographic is making their move. Why? Well, there could be a myriad of reasons but the one that jumps out to me immediately is the announcement from CMHC about the insurance increase from $1 million to $1.5 million.To me, this is fuelling the jump in sales for Detached and Semi Detached.
Detached homes went from 484 sales to 599, a 32.29% increase
Semi-Detached went from 133 to 180, a 35.34% increase.
Freehold Townhomes had no change whatsoever, last month there were 59 sales, and in September, exacty 59 again.
Condo Townhomes went from 110 to 99, a -10% decrease
Condo Apartments went from 992 to 864, a -2.71% decrease.
Key Takeaway - The buyers who could already qualify for these amounts are not waiting for December for a new slew of other buyers (aka competition), to come and mess up their plans. Right now, you can still negotiate price and favourable terms, there are some bidding wars, but not on every single property. The feeling right now, is that buyers are in control and still have leverage and the home prices are still quite reasonable, so if they find their dream home and the deal makes sense, why wait? Even with the rates today, the buyer experience is relatively stress free and as an agent, it's a great feeling to be able to negotiate a great deal for my clients. Come December, I think we will see bidding wars more and more again (Argh, I hate them too), and that's why some buyers are acting now.
Remember last month’s Market Update when Detached homes were the only ones with rising prices? Well, in September, we saw a positive shift as every property type experienced an increase in average price, except for Detached homes, funny enough. Even then, the drop in average price was a mere -0.38% ($1,692,239 - $1,685,755). This is a significant development, indicating a potential turnaround in the market. For the first time in a long time, prices are on the rise, which is great news for sellers and a clear sign that buyers are returning and the interest rate drops are having an impact.
September was a remarkable month for townhomes, both condo freehold, as they bounced back from the previous month's 10% and 4% declines with identical increases. It's safe to say that August was just a blip for townhomes, and they are back on track.
Looking more closely,
Semi-Detached went from $1,204,678 to $1,299,324, a 7.86% increase.
Freehold Townhomes increased from $1,104,678 to $1,221,039, a 10.53% increase. Oddly enough, an almost exact opposite happened last month, with a 10.21% decrease in price. Let’s call August a mulligan, shall we?
Like Freehold Townhomes, Condo THs went from $800,446 to $833,706, a 4.15% increase.
Even Condo Apartments started showing signs of life again, going from $681,835 to $707,917, a 3.83% increase.
Key Takeaway - Price increases for Toronto Condos? A 10% bounce-back increase for Freehold Townhomes after a dreadful few months? What is happening? I thought the market was dead, over, finished and finally the bubble had popped? Sellers rejoice, the end is NOT nigh, and buyers, *ahem*, it might be time to start getting off the fence and into the field again before prices continue to rise.
Four out of five property types took fewer days to sell, and they did it in a significantly less amount of time than last month. Only Condo Apartments remained unchanged from last month.
Looking at each property type :
Detached went from 25 - 21 days to sell (-16%).
Semi-Detached 21-17 days (a -19.05% decrease).
Freehold Townhome 21 -17 days (a -19.05% decrease).
Condo Townhomes 26 to 34 days (a -11.76% decrease).
Condo Apartments 34 to 34 days (no change).
Key Takeaway - Sales are up, the average price is up, and now, selling in less time? Consider this the Real Estate holy trinity to sellers and a warning sign to buyers that a shift is happening right now.
Ok! That's it for now. Thanks for reading and have a great day! 👋 - Tyson CR
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