Still on Ice

In January, Toronto Metro sales continued to weaken, which is typical for this time of year, as sales usually decline between May and January. Sales fell to 3,082, down 17% month-over-month, 20% lower year-over-year, and 31% below the 10-year average.

New listings surged to 10,774 in January, up 103% month-over-month but down 13% year-over-year, and 20% above the 10-year average. The rebound aligns with typical seasonal patterns, as listing activity generally accelerates from January through May.

Active inventory rose to 17,975 units in January, up 6% month-over-month. It was 5% higher year-over-year and 75% above the 10-year average. The increase aligns with typical seasonal patterns, as activity usually picks up from January through May.

In January, the market balance indicator, measured by months of inventory, surged to 5.8, 124% above the 10-year average. This represented the weakest January reading since at least 2006, excluding the 2008 financial crisis, with condos continuing to underperform the broader market. Historically, this level has been associated with annual price declines of around 3%.

Another market balance indicator, the sales-to-new listings ratio, dropped to 0.29 in January, remaining 44% below the 10-year average. This represented one of the weakest January readings on record. Historically, this ratio has been associated with annual price declines of around 7%.

In January, the benchmark price for a typical property declined 0.7% month-over-month to $936,100, while the median and average prices also edged down. Overall, prices remained 7–8% lower year-over-year and 27–30% below 2022 peaks.

Toronto Metro’s rental market continued to soften in December, though it slightly improved after seasonal adjustment. The market balance indicator, rental months of inventory, rose to 2.78, 29% above the 10-year average, reflecting one of the weakest December rental performances. Typically, the rental market softens from August through December.

In December, the average rent in Toronto Metro fell to $2,724, down 3.6% year-over-year and 13% below the 2023 peak. The decline follows typical seasonal patterns, with rents generally easing from August through January.

New home sales fell sharply to 240 units in December, standing 80% below the nine-year average. The 12-month total fell to 4,714 units, extending the ongoing 23-month streak of below-average annual sales.

In December, the high-rise benchmark price fell 0.2% month-over-month to $1,021,235, holding flat year-over-year and remaining 18% below its peak. Meanwhile, the low-rise benchmark price declined 0.5% to $1,409,725, down 9% year-over-year and 27% below its peak.

In December, housing starts in Toronto Metro rose to 2,462 units, standing 5% below the 10-year average. Over the past 12 months, total starts rose to 26,087 units, 32% below the historical norm.

Housing completions increased to 1,632 units in December, standing 41% below the 10-year average. Over the past 12 months, 36,063 units were completed, 2% above the historical norm.

In January, the lowest five-year fixed mortgage rate decreased by 0.20 percentage points to 3.64%, while the lowest five-year variable rate remained unchanged at 3.40%, narrowing the gap between the two to 0.24 percentage points.

Housing affordability in the Toronto Metro improved in January, with mortgage payments on a newly purchased typical property consuming 44% of median household income, down from 45% observed previously.

Ontario’s unemployment rate rose to 7.9% in December, reflecting a 5% year-over-year increase and standing 17% above the 10-year average. Nationally, the rate rose to 6.8%, 3% above the 10-year average, while in Toronto it fell to 8.1%, remaining 8% above its 10-year average.

In October, Ontario’s mortgage arrears rate rose to 0.26%, reflecting a 53% year-over-year increase and standing 132% above the 10-year average. Nationally, the rate inched up to 0.25%, representing a 19% annual increase and remaining 14% above the 10-year average.