What buyers and sellers do in September will set the tone for the rest of the season.
August is typically a quiet month in the housing market. Many active buyers often hit pause to enjoy the last month of warm weather, and few buyers start their home search in August.
September is typically much busier as it marks the start of the fall home-buying season. The first month of the fall market can often give us clues into how the market will likely progress for the remainder of the calendar year.
The key trend we need to monitor is the relationship between demand (the number of sales) and supply (new listings). If demand outpaces supply, months of inventory will begin to decline, and the market will gradually become more competitive than it has been over the previous few months.
However, if new listings come on the market faster than people buy them, inventory will gradually build, which may put downward pressure on prices.
After nearly 20 years of analyzing and writing about Toronto's housing market, I've learned that predicting where the market will be, even several months from now, is impossible. That said, I'll still offer my outlook for the fall market.
I'm expecting the market for low-rise houses to become a bit more competitive than it has been over the previous few months. This means that sales should outpace new listings, which would put downward pressure on the months of inventory.
We are seeing more buyers who were waiting on the sidelines plan to jump back into the market now to take advantage of a less competitive market where relatively few homes are receiving multiple offers from buyers. While rates are still relatively high, most buyers are looking for short-term mortgages, anticipating rates to be lower a year or two when it's time for them to renew.
However, I'm not expecting a significant surge in demand or a rapid price acceleration. Some buyers are still sitting on the sidelines, waiting for rates to drop further, which would increase the amount they can borrow for a mortgage and, by extension, how much they can spend on a home.
But I'm not as confident we'll see the same trends unfold in the condo market.
Investors play a bigger role in the condo market, and the slight drop in interest rates is still not enough to make buying an investment condo an attractive investment. This means that if the demand for condos increases this fall, the growth will likely be more modest than the increase in demand for low-rise homes.
However, the big factor that will impact the outlook for the condo market is the growth in new listings. Between January and August of this year new listings for condos were up 24% over the previous year. If this trend continues, we could see inventory levels remain elevated and possibly even increase in the months ahead.
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By the Numbers: August 2024
The average price for a house in the Toronto area was $1,318,684 in August, down 1% from the same month last year. Last month's median house price was $1,125,000, down 3% from the same month last year.
House sales in August were down 3% over last year, while new house listings were unchanged. The number of houses available for sale at the end of the month, or active listings, was up 30% over last year.
The current balance between supply and demand is reflected in the MOI, which measures inventory relative to the number of sales each month. In August, the MOI for houses was unchanged at 3.9.
The average price for a condo in the Toronto Area was $693,845 in August, down 6% from the previous year. The median price for a condo in August was $633,751, down 6% from the previous year.
Condo sales in August were down 15% from last year, but new condo listings were unchanged. The number of active condo listings was up 43% from last year. The MOI decreased slightly to 5.7.
Browse detailed monthly statistics for August 2024 for the entire Toronto area market, including house, condo and regional breakdowns below.
Monthly Statistics
House Statistics
House sales (low-rise freehold detached, semi-detached, townhouse, etc.) in the Greater Toronto Area (GTA) in August 2024 were down 3% compared to the same month last year.
New house listings in August were unchanged compared to last year.
The number of houses available for sale (“active listings”) was up 30% in August compared to the same month last year.
The Months of Inventory ratio (MOI) looks at the number of homes available for sale in a given month divided by the number of homes sold in that month. It answers the following question: If no more homes came on the market for sale, how long would it take for all the existing homes on the market to sell, given the current level of demand? The higher the MOI, the cooler the market is. A balanced market (a market where prices are neither rising nor falling) is one where MOI is between four to six months. The lower the MOI, the more rapidly we would expect prices to rise.
While the current level of MOI gives us clues into how competitive the market is on-the-ground today, the direction it is moving in also gives us some clues into where the market will be heading.
The MOI for houses was unchanged at 3.9 for August.
The share of houses selling for more than the owner’s list price decreased to 30% in August.
The average price for a house in August 2024 was $1,318,684, down 1% from the same month last year.
The median house price in August was $1,125,000, down 3% over last year.
The median is calculated by ordering all the sale prices in a given month and then selecting the price at the midpoint of that list such that half of all home sales are above that price and half are below that price. Economists often prefer the median price over the average because it is less sensitive to big increases in the sale of high-end or low-end homes in a given month, which can skew the average price.
Condo Statistics
Condo (condominiums, including condo apartments, condo townhouses, etc.) sales in the Toronto area in August 2024 were down 15% compared to the same month last year.
New condo listings were unchanged in August over last year.
The number of condos available for sale at the end of the month, or active listings, was up 43% over last year.
Condo months of inventory decreased slightly to 5.7 MOI in August.
The share of condos selling for over the asking price was unchanged at 21% in August.
The average price of a condo in August was $693,845, down 6% from last year. The median price was $633,751, down 6% from last year.
Regional Trends
Houses
Sales were up by 5% in Toronto and 4% in Peel, but down in Durham, Halton and York. Average prices were up by 2% in Toronto but down modestly across all four suburban regions. New listings were up by 6% in Peel and down 8% in Toronto. Months of inventory was up across all regions.
Condos
Condo sales were up in Durham but down in the other GTA regions with Toronto seeing the biggest decline in sales. Average prices were flat in Halton and down across the rest of the GTA. New listings and MOI were well above last year’s level for all regions. The City of Toronto has the highest MOI across all five regions.
Browse Real-Time Market Trends on MoveSmartly.com:
See Market Performance by Neighbourhood Map, All Toronto and the GTA
Greater Toronto Area Market Trends
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).
Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn
