The Weight of Supply

The Toronto Metro real estate market remained weak in March, with sales significantly below the historical average. Active inventory rose, reaching the highest level for this month since 2009, and key market balance indicators such as months-of-inventory and sales-to-new listings ratio were exceptionally weak. The rental market also struggled, with mixed price trends and a soft market balance. New construction sales hit a record low, while housing starts and completions were substantially below the 10-year average. Although mortgage rates and affordability showed slight improvement, mortgage arrears continued to rise. Overall, despite some positive shifts, the market continues to face ongoing pressures.

Toronto Metro sales rose to 5,011 in March but declined slightly after seasonal adjustment, marking the weakest March level since at least 2006. This represented a 24% month-over-month increase, a 24% year-over-year decline, and a level 44% below the 10-year average. Sales typically rise between January and May.

New listings rose in March to 17,263—up 43% month-over-month, 32% higher year-over-year, and 8% above the 10-year average. The monthly change was mostly in line with seasonal patterns, as new listings typically rise between January and May.

Active inventory rose in March to 23,462 units—the highest level for this month since 2009. It was up 20% month-over-month, 88% year-over-year, and 82% above the 10-year average. Active inventory typically increases between January and May.

The market balance indicator, months of inventory, edged lower in March but weakened significantly after seasonal adjustment. It stood 172% above the 10-year average, with condos as the weakest segment. Historically, this level has aligned with a 13% annual price decline.

Another key indicator, the sales-to-new listings ratio, declined slightly to the level 48% below the 10-year average— marking the lowest level for March since at least 2006. Historically, this ratio has corresponded with an annual price drop of 17%.

Price metrics were mixed in March. The benchmark price, representing a typical property, declined 0.5% month-over-month to $1,068,500, while the median price increased. Prices remained 3–4% lower year-over-year and 18–22% below the 2022 peak.

Toronto Metro’s rental market strengthened in March but weakened after seasonal adjustment. The months-of-inventory indicator, reflecting market balance, was 52% above the 10-year average—the weakest reading for this month in at least 14 years. Historically, the rental market tends to strengthen between January and August.

In March, the average rent in Toronto Metro increased to $2,877, down 1.3% year-over-year and 1.1% below 2022 levels. Rent prices typically rise between January and August.

February’s new construction sales were 83% below the nine-year average, with a 12-month total of 8,795 units—a 71% drop from the historical level. This marks the lowest sales since at least 2016 and represents the tenth consecutive month of new record lows.

In February, the high-rise benchmark price rose 0.6% month-over-month to $1,021,760, down 2% year-over-year and 18% below its peak. The low-rise benchmark price declined 1% month-over-month to $1,536,734, down 3% from the previous year and 21% below its peak.

February housing starts were 55% below the 10-year average. Over the past year, 32,911 units were started in Toronto Metro, 18% below the historical average.

Housing completions in February were 25% below the 10-year average, with a 12-month total of 38,898 units—still 10% above the historical norm.

In March, the lowest 5-year fixed mortgage rate fell by 0.3 percentage points to 3.69%, while the lowest 5-year variable rate also dropped 0.3 percentage points to 3.90%. The gap between the two stood at 0.21 percentage points.

Housing affordability in Toronto Metro improved in March. Covering mortgage payments on a newly purchased property now requires 52% of a typical household’s income, down from 54% previously.

Ontario’s unemployment rate declined to 7.3% in February, reflecting an 11% annual increase and standing 9% above the 10-year average. Nationally, the rate remained unchanged at 6.6%, matching the 10-year norm. In Toronto, the unemployment rate decreased from 8.8% to 8.6%, remaining 17% above the 10-year average.

Ontario’s mortgage arrears rate rose to 0.19% in December, up 58% year-over-year and 78% above the 10-year average. Nationally, the rate also increased to 0.22%, marking a 22% annual rise, but still 1% below the 10-year average.