The Toronto Area real estate market once again posted strong numbers in October.
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The Market Now
Those hoping for a slow-down in the Toronto area’s housing market will need to wait a bit longer — all indicators from the past month’s data for October 2021 are showing a market that is actually heating up rather than cooling down.
But the strong demand we are seeing today is very different from the demand we were seeing a year ago. This time last year, the strong demand was largely driven by a surge in home buyers entering the market. This year, the surge in demand is coming from investors rather than end users. In this month’s Data Dive section (see in this report, below), I discuss the irrational exuberance that I’m seeing from Toronto area real estate investors.
House sales were down 18% on a year-over-year basis in October, but well above pre-Covid 19 pandemic levels for October in 2018 and 2019.
New listings in October were down 33% over last year and well below pre-Covid levels in 2018 and 2019.
At the end of October, the Toronto area had only 3,687 houses available for sale, a 56% decline from inventory levels last year and well below the roughly 12,000 active house listings that are more typical for the month of October.
The average price for a house in October was $1,445,088, up 28% over last year; the median house price in October was $1,265,000, up 33% over last year.
Condominium (condo) sales in October were up 20% over last year and above the pre-Covid 19 levels for the same month in 2018 and 2019.
New condo listings were down by 36% in October 2021 over last year, but above the volumes in 2018 and 2019. The number of condos available for sale at the end of the month, or active listings, was down 54% over last year.
The average price for a condo in October reached $730,726, up 15% over last year; the median price for a condo in October was $660,000 up 15% over last year.
(For all monthly statistics for the Toronto Area, including house, condo and regional breakdowns, see the final section of this report.)
House sales (detached, semi-detached, townhouse, etc.) in the Toronto area in October 2021 were down 18% over the same month last year.
Sales will likely continue to be negative on a year-over-year basis until at least the first quarter of 2022 since we’ll be comparing against a period that saw a sudden shock in demand for houses following the initial Covid-19 lockdowns. But it’s worth noting that sales in September were above levels for the same month in pre-Covid 2018 and 2019.
New listings in October were down 33% over last year. But unlike sales volumes which were strong compared to pre-Covid levels, new listings in October were well below the listings volumes seen in 2018 and 2019.
The number of houses available for sale (“active listings”) was down 56% when compared to the same month last year and 66% below the inventory levels seen in pre-Covid 2019.
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 that 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.
This October, the market remained very competitive with the MOI trending down to 0.6 months.
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 may be heading. The MOI has remained relatively stable at or below a very competitive 1 MOI for the past twelve months.
The share of houses selling for more than the owner’s asking price climbed from 68% in August to 75% in October.
Average house prices had plateaued in 2021, remaining relatively constant in the $1.3M range since the start of the year, but that trend ended this September when average prices surged above $1.4M and average prices continued to climb in October to $1,445,088, up 28% over last year.
The median house price in October was $1,265,000, up 33% over last year.
Condo (condominiums, including condo apartments, condo townhouses, etc.) sales in the Toronto area in October were up by 20% over last year and up 22% compared to pre-Covid 2019.
New condo listings were down by 36% in October 2021 over last year, but well above the volumes in 2018 and 2019.
The number of condos available for sale at the end of the month, or active listings, was down 54% over last year, a period that saw a surge in condo listings due to declining prices, falling rents and rising vacancy rates.
The relatively strong demand of new listings (supply) helped push the MOI down to just over 1 MOI for the month of October.
The competition for condos picked up very slightly with the share of condos selling for over the asking price rising from 45% in August to 52% in October.
Average condo prices plateaued at approximately $700K for most of 2021, but increases have started to resume over the past two months. The average price for a condo in October reached $730,726, up 15% over last year. The median price for a condo in October was $660,000 up 15% over last year.
Sales across all five regions in the GTA were down in October while average prices were up on a year-over-year basis. The decline in new listings helped keep the market competitive with MOI below 1 across the entire GTA, indicating a strong seller’s market.
Toronto, York and Peel saw condo sales up on a year-over-year basis while the other regions saw a decline in sales. Average prices were up double digits across the Toronto area. Also indicative of strong market conditions, current MOI levels are below 1 in the suburbs and just 1.4 in the City of Toronto.
Browse All Real-Time Regional Market Trends on Movesmartly.com:
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