Greater Toronto Area (GTA) home sales fell 44% last month from last September and 10% from August as the market experienced the lowest number of new listings September has seen in 20 years.
The Toronto Regional Real Estate Board released the data Wednesday, as brokers noted the 5,038 home sales reported in the typically busy month were bogged down by mortgage rate hikes, tipping the market back toward a more balanced state.
The numbers mark a continuation of a market cooldown that has already put a damper on bidding wars and discouraged some sellers from listing their properties because they likely won’t fetch as much money as their neighbours did at the start of the year, when the market was moving at a torrid pace.
“The general temperature of the market is much calmer,” said Cailey Heaps, president of the Heaps Estrin Real Estate Team in Toronto.
“We aren’t seen that frenzy and that pressure that we agents, clients and everyone was dealing with in the early part of the year, so it’s a more balanced approach, where people are taking time.”
She’s noticed a “Catch-22” playing out, where sellers hear stories of a market cooldown so they hold off listing their properties, further fueling the downturn.
Some of that sentiment contributed to the region reporting 11,237 new listings, an almost 17% drop from a year ago and the lowest number for the month since 2002.
The fall in new listings was coupled with the composite benchmark price reaching $1,086,762, a 4.3% dip from last year, but an almost 1% rise from August.
Heaps still sees some sellers pricing their homes as if it were months ago, when the market was roaring.
“But those people who are realistic about pricing and sort of forget the first five months of 2022 and price to today’s market, in the central core of Toronto, those properties are selling,” she said.
The market is also causing some mind games for buyers.
“Buyers like a house and they want to go after the house, but…they’re embarrassed to buy in a market that might be changing further,” she said.
“But as soon as someone else offers or if someone else expresses strong interest, then they’re willing to enter the market.”
The result means smaller bidding wars are happening several weeks into a listing being on the market, Heaps noticed.
Average prices were highest in the 905 — part of the GTA encompassing suburban regions like Vaughan and Durham — where they totalled $1,099,938. In the 416, a nickname for the City of Toronto that excludes its suburbs, the average price was $1,061,876.
Across all the areas studied by TRREB, average prices of detached homes fell 10% year-over-year to $1,369,186, semi-detached properties dropped by 6.5% to $1,043,120 and townhouses edged down by almost 1% to $901,592. Condos, however, rose by roughly 3% to $730,818.
“October generally represents the peak of the fall market, so it will be important to see where price trends head over the next month,” TRREB’s chief market analyst, Jason Mercer, said in a news release.
The year-over-year fall in overall prices across all categories, but month-over-month increase that the GTA saw was mirrored in B.C., where the Real Estate Board of Greater Vancouver said the composite benchmark price reached $1,155,300 last month. That price was up 3.9% from last September but down 2.1% from August.
“Although Vancouver is one of the priciest cities in the world, look for broadly similar trends to unfold in many other Canadian markets that thumbed their nose at affordability when borrowing costs were three points lower than today,” BMO Capital Markets senior economist Sal Guatieri said in a Tuesday note to clients.
Similar to Toronto, the Vancouver board also said home sales in September dropped by 46% since last year and 10% from August as interest rate increases cooled buyer sentiment.
The sales for the month were almost 36% below the 10-year September sales average.