Tentative Traction

In May, sales in the Toronto metro area continued to strengthen, consistent with typical seasonal patterns where activity rises from January through May. Sales reached 6,583, up 11% month-over-month and 5% year-over-year, though still 18% below the 10-year average. Despite the monthly gain, this remained one of the lowest May sales volumes since at least 2006.

New listings edged up 4% month-over-month to 17,698 units in May. Despite this rise, volume trailed the prior year by 19% and sat 4% below the 10-year average. Listing volume generally increased from January through May.

Active inventory climbed to 26,927 units in May, up 7% month-over-month but 13% lower year-over-year and 42% above the 10-year average. This was one of the highest May levels recorded and followed the seasonal pattern, with activity typically increasing from January to May.

In May, the market balance indicator, measured by months of inventory (MOI), edged down to 4.1, standing 60% above the 10-year average. Historically, this level has been associated with annual price declines of approximately 9%. Condominiums continued to underperform the broader market.

Another market balance indicator, the sales-to-new listings ratio, rose to 0.37 in May, standing 17% below the 10-year average. Historically, a ratio at this level has been associated with annual price declines of approximately 10%.

In May, the benchmark price for a typical property increased 0.3% month-over-month to $946,500, while the median and average prices also edged up. Overall, annual price remained 5–7% lower year-over-year, and 20–26% below 2022 peaks.

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Toronto Metro’s rental market showed further signs of tightening in April. The market balance indicator, rental months of inventory, contracted further to 1.55, closing in on the historical norm at just 15% 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 April, the average rent in the Toronto Metro rebounded to $2,718, narrowing its year-over-year decline to 3.0% and standing 13% below the 2023 peak. This increase aligns with the typical seasonal pattern in which rents rise fro February through August.

New home sales climbed to 1,100 units in April, though they remained 55% below the ten-year average. The 12-month total reached 6,120 units, sitting 76% below the historical norm. The increase has been led by a low-rise segment.

In April, the high-rise benchmark price edged up 0.2% month-over-month to $1,029,164, reflecting a 1% year-over-year increase and remaining 18% below its peak. Meanwhile, the low-rise benchmark price rebounded 0.6% to $1,421,835, representing a 7% year-over-year decline and standing 26% below its peak.

In April, housing starts in the Toronto Metro surged to 3,080 units, bringing them to just 3% below the 10-year average. Over the past 12 months, total starts reached 26,694 units, sitting 30% below the historical norm.

Housing completions dropped further to 1,376 units in April, standing 50% below the 10-year average. Over the past 12 months, 31,201 units were completed, which is 11% below the historical norm.

In May, the lowest five-year fixed mortgage rate rose slightly to 4.04%, while the lowest five-year variable rate showed no change at 3.30%, widening the gap between the two to 0.74 percentage points.

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

In April, Ontario’s unemployment rate fell slightly to 7.5%, reflecting a 4% decrease year-over-year and standing 11% above the 10-year average. Nationally, the rate ticked up to 6.9%, which is 5% above its 10-year average, while in Toronto it rose to 8.2%, standing 9% higher than the 10-year average.

In February, Ontario’s mortgage arrears rate rose to 0.30%, reflecting a 50% year-over-year increase and standing 158% above the 10-year average. Nationally, the rate edged up to 0.28%, representing a 22% annual increase and staying 28% above the 10-year average.