Toronto-area home sales plummeted in November as prices declined for the 10th month in a row.
Sales dropped 15.8 per cent year over year in November, while prices fell 6.4 per cent to $1.03 million, according to a report Wednesday from the Toronto Regional Real Estate Board (TRREB).
The average sales price for all property types has dropped by 22 per cent since the February 2022 peak.
Intending homebuyers remained on the sidelines awaiting more positive economic news, the report said.
“The uncertainty around the economy needs to be minimized, there’s some good economic news in November related to GDP, but then there was also news of Algoma laying off employees, indicating fragility in the market,” TRREB chief information officer Jason Mercer told the Star, adding that economic uncertainty will continue to impact buyer and seller confidence moving forward.
Canada’s economy posted surprisingly strong growth in the third quarter, however weakness lingers from U.S. tariffs. On Monday, Algoma Steel Group served layoff notices to about 1,000 workers, or 40 per cent of its workforce, in a bid to weather the financial storm emanating from tariffs.
“Buyers and sellers need to see more good news on the trade front to take advantage and move into the market,” Mercer said. “But people are also not so sure about covering monthly mortgage costs, when jobs or the prospect of job loss is there.”
The sales-to-new listings ratio is 44 per cent, indicating a balanced market.
This is in large part due to fewer sellers listing their homes, while buyers also have deserted the market.
“If you don’t think you’ll get the pricing you want, then sellers will wait on the sidelines,” Mercer said.
On a seasonally adjusted basis, November home sales were down less than one per cent month-over-month compared to October.
In Toronto, the nine per cent year-over-year drop in detached home prices was the largest decline, followed by semi-detached at a 4.8 per cent decline, townhomes at a 3.7 per cent drop, and condos at a 1.7 per cent decline.
Because detached homes are the most expensive property type, if there are fewer sales it can skew the data to show a significant drop in pricing, Mercer said.
For sales, condos saw the largest sales decline at 21.8 per cent.
The condo market is experiencing what some experts call a crash, where sales and prices continue to spiral downward, as investors have fled the market and first-time homebuyers aren’t jumping in as they want bigger units than what’s available.
Condo prices in Toronto have dropped 15 per cent since the February 2022 peak.
While the pricing might be more favourable than lowrise homes to first-time homebuyers, that buyer group also has less savings and, therefore, they are more sensitive to economic instability.
Detached homes also saw a significant decrease in sales of 11.4 per cent in Toronto. That’s because there aren’t as many listings and the property type is the most expensive, which potential buyers are shying away from until the economy stabilizes, Mercer said.
The Bank of Canada dropped its key interest rate to 2.25 per cent in October, which is likely the lowest it will go for the foreseeable future, economists forecast.
