Toronto-area home prices dropped four per cent in April as buyers gained greater negotiating power following months of drastic sale declines.
Sales in April did pick up 1.8 per cent compared to March, but saw a staggering drop of 23 per cent year over year, according to the Toronto Regional Real Estate Board’s (TRREB) April report.
There were 5,601 sales in April, the lowest April sales data since 2010, with the exception of April 2020 right after pandemic lockdowns began.
“The preconditions are there for recovery once we see more certainty on the economic front,” said TRREB chief information officer Jason Mercer. “But people are a bit uncertain about where the economy is going and where their employment situation may be heading. People are likely hesitant to entertain a large ticket until there’s more clarity.”
New listings amounted to 18,836, up by 8.1 per cent year over year, with the sales-to-new-listings ratio reaching 29.7 per cent, indicating a buyers’ market.
The average selling price, at $1.1 million, was down by 4.1 per cent compared to April 2024. On a month-over-month basis, the average selling price dropped 0.7 per cent.
Average selling prices have remained relatively flat, but are finally beginning to show greater price drops as supply outstrips demand, Mercer said.
“Households looking to purchase a home have benefitted from more choice,” he said, adding that selling prices are being negotiated, dragging overall pricing down.
“Oftentimes, it takes some time for market signals to filter through (to the greater market).”
All property types saw annual price declines with detached, semi-detached, townhomes and condos seeing a 5.4 per cent, 4.1 per cent, 3.9 per cent and 6.8 per cent drop, respectively.
There were also substantial year-over-year sales declines with detached, semi-detached, townhomes and condos seeing a whopping 21 per cent, 10 per cent, 23 per cent and 30 per cent drop, respectively.
Condos continued to see the worst price and sales declines with little relief in sight.
TD forecasts that by the end of 2025, condo prices will likely drop between 15 and 20 per cent from their 2023 third-quarter peak with a roughly 10 percentage point decline taking place this year.
Sales are likely to remain muted, the recent TD report said.
The Bank of Canada’s interest rate pause on April 16 has also curbed buyers’ hope of further rate cuts.
“It’s a balancing act,” Mercer said, adding the central bank has to curb inflation but also given U.S. tariffs could increase prices a rate cut “might not make the most sense.”
On the flip side, lower prices coupled with lower borrowing costs “translated into more affordable monthly mortgage payments,” Mercer said.
