The Weight of Supply

In March, sales in the Toronto metro area continued to strengthen, consistent with typical seasonal patterns where activity rises from January through May. Sales reached 5,039, up 30% month-over-month and 1% year-over-year, though still 40% below the 10-year average. Despite the monthly gain, this marked one of the lowest March sales volumes since at least 2006.

New listings climbed 35% month-over-month to 14,442 in March. Despite this increase, volume remained 16% below the previous year and 9% down compared to the 10-year average. Listings typically rise from January through May.

Active inventory rose to 21,596 units in March, up 12% month-over-month, 8% lower year-over-year and 56% above the 10-year average. The increase aligned with typical seasonal patterns, as activity usually picked up from January through May.

In March, the market balance indicator, measured by months of inventory, fell to 4.3, standing 111% above the 10-year average. This marked one of the weakest March readings since at least 2006. Historically, this level has been associated with annual price declines of approximately 10%. Condominiums continued to underperform the broader market.

Another market balance indicator, the sales-to-new listings ratio, fell to 0.35 in March, standing 34% below the 10-year average. This represented one of the weakest March readings on record. Historically, this ratio has been associated with annual price declines of about 12%.

In March, the benchmark price, representing a typical property, increased 0.3% month-over-month to $941,800, while the median and average prices also edged up. Overall, prices remained 7–8% lower year-over-year and 24–28% below 2022 peaks.

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Toronto Metro’s rental market showed signs of tightening in February. The market balance indicator, rental months of inventory, fell to 2.47, though it remains 33% above the 10-year average. The rental market typically strengthens between January and August.

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In February, the average rent in Toronto Metro fell to $2,694, down 3.5% year-over-year and 14% below the 2023 peak. This decline is slightly unusual since rents usually climb from February through August.

New home sales rose to 531 units in February, still 76% below the ten-year average. The 12-month total reached 4,767 units, remaining 82% below the historical norm, but marking the end of a 24-month streak of consecutive declines in annual sales.

In February, the high-rise benchmark price fell 0.5% month-over-month to $1,022,063, with no year-over-year change and 18% below its peak. The low-rise benchmark price rose 1.9% to $1,423,219, down 7% year-over-year and 26% below its peak.

In February, housing starts in the Toronto Metro fell to 1,072 units, standing 65% below the 10-year average. Over the past 12 months, total starts fell to 25,624 units, 33% below the historical norm.

Housing completions increased to 2,920 units in February, standing 11% below the 10-year average. Over the past 12 months, 35,515 units were completed, 1% above the historical norm.

In March, the lowest five-year fixed mortgage rate increased by 0.35 percentage points to 3.99%, while the lowest five-year variable rate decreased by 0.05 percentage points to 3.30%, widening the gap between the two to 0.69 percentage points.

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

Ontario’s unemployment rate rose to 7.6% in February, reflecting a 4% year-over-year increase and standing 12% above the 10-year average. Nationally, the rate inched up to 6.7%, reaching 2% above its 10-year average, while in Toronto it climbed to 8.1%, 8% higher than the 10-year average.

In December, Ontario’s mortgage arrears rate rose to 0.27%, reflecting a 42% year-over-year increase and standing 137% above the 10-year average. Nationally, the rate edged up to 0.26%, representing an 18% annual increase and staying 19% above the 10-year average.