Toronto real estate sales may be cooling, but that didn’t stop condo prices from hitting a new high.Toronto Real Estate Board (TREB) numbers show condo prices hit a new record in May, despite slowing sales. The slowing sales are starting to become a drag on price growth, as inventory swells to a multi-month high.
Toronto Condo Prices Hit An All-Time High
The price of a typical home, called the benchmark, hit a new high for condos across Greater Toronto. TREB reported a benchmark of $501,000 in May, an 8.29% increase compared to last year. The City of Toronto reached $527,100, a 10.12% increase from last year. Despite the record high, the growth rate of prices is something to watch closely.
To give some context to the that growth rate, it’s huuuge… but tapering quickly. The 8.29% increase observed across TREB is down from the 30.6% peak growth hit last year. The City of Toronto’s 10.12% annual growth is down
The Median Condo Sale Price Is Up Over 9%
Those skeptical of the benchmark have begun using the median sale price. TREB reported a median sale price of $499,800, a 9.24% increase from last year. The City of Toronto saw the median sale price rise to $537,000, a 10.72% increase from last year. Median sale prices are not adjusted for size or quality, like the benchmark is, but do show the flow of money. In this case, it’s still higher.
from a peak of 32.6%. For context, the median rate of growth for condo apartments since 2005 has been under 5% for both regions. If the laws of mean reversion applies to condos, growth will plunge below the median line. How long it stays there is dependent on how far below it goes.
Average Toronto Condo Price Rises Over 5%
The average sale price is tapering a little more than the other two metrics. TREB had an average sale price of $562,892, a 5.7% increase from last year. The City of Toronto had an average sale price of $602,804. a 6.5% increase from last year. Much like the median, the average sale price isn’t helpful for determining how much you’ll pay. Rather, it’s a better indicator of upgrade flow.
Toronto Condo Sales Are Down Over 15%
Prices might be up, but condo sales continue to decline. TREB reported 2,393 condo sales in May, a 15.5% decline compared to last year. The City of Toronto saw 1,745 of those sales, a 13.8% decline compared to last year. Declining sales are normal as prices rise, since price rise normally rise due to a lack of inventory. Strangely, that’s not the case right now.
Toronto Condo Inventory Grows Over 13%
New condo listings are on the decline across Greater Toronto. TREB reported 4,260 new listings, a 15.69% decline from last year. Of those new listings, 2,966 new listings were located in the City of Toronto, a 17.97% decline from last year. The decline in new listings didn’t stop inventory from building though.
The sharp decline in sales continued to push active listings higher. TREB reported 3,993 active condo listings, a 13.79% increase from last year. The City of Toronto represented 2,552 of those sales, a 1.71% increase compared to last year. This is the highest active listings for condos in 21 months. That’s not that long, but people tend to have short memories.
Toronto condo prices hit an all-time high, but price growth is rapidly tapering. Lower sales, more inventory, B-20 Guidelines, and higher interest rates are going to be a drag on future price growth. On the other hand, there’s still buyers that want a condo so bad, they’re willing to go to subprime lenders.