A Fragile Lift

In April, sales in the Toronto metro area continued to strengthen, consistent with typical seasonal patterns where activity rises from January through May. Sales reached 5,946, up 18% month-over-month and 6% year-over-year, though still 25% below the 10-year average. Despite the monthly gain, this remained one of the lowest April sales volumes since at least 2006.

New listings climbed 18% month-over-month to 17,097 units in April. Despite this rise, volume trailed the prior year by 9% and sat 4% above the 10-year average. Listing volume generally increased from January through May.

Active inventory rose to 25,110 units in April, up 16% month-over-month but 8% lower year-over-year and 52% above the 10-year average. This was one of the highest April levels recorded and followed the seasonal pattern, with activity typically increasing from January to May.

In April, the market balance indicator, measured by months of inventory(MOI), fell to 4.2, standing 72% above the 10-year average. This marked one of the weakest April readings since at least 2006. However, on a seasonally adjusted basis, MOI remained relatively unchanged. Historically, this level has been associated with annual price declines of approximately 11%. Condominiums continued to underperform the broader market.

Another market balance indicator, the sales-to-new listings ratio, held steady at 0.35, standing 28% below the 10-year average. This represented one of the weakest April readings on record. Historically, a ratio at this level has been associated with annual price declines of approximately 13%.

In April, the benchmark price for a typical property increased 0.2% month-over-month to $944,100, while the median and average prices also edged up. Overall, prices remained 5-7% lower year-over-year and 21–27% below 2022 peaks.

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Toronto Metro’s rental market showed further signs of tightening in March. The market balance indicator, rental months of inventory, fell sharply to 1.76, though it remains 37% above the 10-year average. This shift aligns with the typical seasonal trend where the rental market strengthens between January and August.

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In March, the average rent in Toronto Metro edged down to $2,691, remaining 3.5% down from previous year levels and 14% below the 2023 peak. This continued dip is notable, as it runs counter to the typical seasonal pattern where rents rise from February through August.

New home sales rose to 948 units in March, though they remained 65% below the ten-year average. The 12-month total reached 5,330 units, sitting 79% below the historical norm.

In March, the high-rise benchmark price rose 0.5% month-over-month to $1,027,477, reflecting a 1% year-over-year increase and remaining 18% below its peak. Conversely, the low-rise benchmark price fell 0.7% to $1,413,863, representing an 8% year-over-year decline and standing 27% below its peak.

In March, housing starts in the Toronto Metro rose to 1,505 units, though they remained 48% below the 10-year average. Over the past 12 months, total starts reached 25,904 units, sitting 32% below the historical norm.

Housing completions dropped to 1,937 units in March, standing 45% below the 10-year average. Over the past 12 months, 31,727 units were completed, which is 10% below the historical norm.

In April, the lowest five-year fixed mortgage rate held steady at 3.99%, while the lowest five-year variable rate showed no change at 3.30%, maintaining the gap between the two at 0.69 percentage points.

Housing affordability in the Toronto metropolitan area remained steady in April. Mortgage payments on a newly purchased typical property consumed 44% of median household income, unchanged from the previous month.

In March, Ontario’s unemployment rate remained at 7.6%, reflecting a 1% year-over-year increase and standing 12% above the 10-year average. Nationally, the rate stayed at 6.7%, 2% above its 10-year average, while in Toronto it held steady at 8.1%, 8% higher than the 10-year average.

In January, Ontario’s mortgage arrears rate rose to 0.29%, reflecting a 53% year-over-year increase and standing 152% above the 10-year average. Nationally, the rate edged up to 0.27%, representing a 23% annual increase and staying 24% above the 10-year average.