Beneath the Surface

In November, Toronto’s housing market showed typical seasonal softness. Sales edged lower and remained below historical norms, while new listings and active inventory also declined but stayed above long-term averages. Market balance indicators continued to point to weakness and ongoing price pressure, with prices easing further. The rental market softened slightly, while new-construction activity was mixed: starts fell sharply, but completions surged, keeping annual levels above average. Fixed mortgage rates dipped, supporting a fifth straight month of improved affordability. Unemployment rates declined modestly across all levels, but mortgage arrears continued to rise. Overall, the market features ample supply and muted demand, with early signs of gradual stabilization.

In November, Toronto Metro sales continued to weaken, which is not uncommon for this time of year, as sales usually decline between May and December. Sales fell to 5,010, down 18% compared to the previous month, 15% lower year-over-year, and 25% below the 10-year average. After seasonal adjustment, sales slipped 1%.

New listings fell to 11,134 in November, down 31% month-over-month but up 4% year-over-year, and 3% above the 10-year average. The decline aligns with typical seasonal patterns, as activity typically slows from May through January except for September’s uptick.

Active inventory fell to 24,549 units in November, down 12% month-over-month. It was 13% higher year-over-year and 64% above the 10-year average. The decline aligns with typical seasonal trends, as listings generally ease from May through January except for September’s slight uptick.

In November, the market balance indicator, measured by months of inventory, rose to 4.9, 94% above the 10-year average. This was the weakest November reading since at least 2006, excluding the 2008 financial crisis, with condos continuing to underperform compared to the broader market. Historically, this level has been linked to annual price declines of about 7%.

Another market balance indicator, the sales-to-new listings ratio, rose to 0.45 in November, 28% below the 10-year average. This is typical for this time of the year and further strengthening is expected next month. Historically, this ratio has been associated with annual price declines of around 10%.

In November, the benchmark price for a typical property declined 0.5% month-over-month to $951,700, while the median and average prices also edged down slightly. Overall, prices remained 6–7% lower year-over-year and 22–27% below 2022 peaks.

Toronto Metro’s rental market softened in October, though it showed slight improvement after seasonal adjustment. The market balance indicator, rental months of inventory, rose to 2.19, 33% above the 10-year average, marking one of the weakest October rental performances. Typically, the rental market softens from August through December.

In October, the average rent in Toronto Metro edged down slightly to $2,840, 3.1% lower year-over-year and 9% below the 2023 peak. The modest change aligns with typical seasonal trends, as rent prices generally trend downward from August through January.

In October, new home sales rose to 570 units, standing 81% below the nine-year average. The 12-month total declined to 5,033 units, marking the lowest annual sales level on record since at least 2016 and continuing a 21-month streak.

In October, the high-rise benchmark price fell 0.2% month-over-month to $1,031,764, up 3% year-over-year but still 18% below its peak. Meanwhile, the low-rise benchmark price fell 0.2% to $1,434,447, down 7% year-over-year and 26% below its peak.

Housing starts in Toronto Metro plunged in October to 1,445 units, 50% below the 10-year average. Annual construction declined as well, with the 12-month total dropping to 24,855 units, 36% below the historical norm.

In October, housing completions rose sharply to 4,131 units, 57% above the 10-year average. Over the past 12 months, 38,054 units were completed, 7% above the historical norm.

In November, the lowest 5-year fixed mortgage rate dipped by 0.05% to 3.69%, while the lowest 5-year variable rate remained unchanged at 3.45%, with the gap between the two narrowing to 0.24 percentage points.

Housing affordability in the Toronto Metro continued to improve in November, with mortgage payments on a newly purchased typical property consuming 45% of a median household income, down from 46%. While the market remains above historical affordability levels, the trend indicates a gradual easing of financial pressure for buyers.

In October, Ontario’s unemployment rate declined to 7.6%, reflecting a 7% annual increase and standing 13% above the 10-year average. Nationally, the rate fell slightly to 6.9%, 4% above the 10-year norm, while in Toronto, it edged down to 8.7%, 16% above its 10-year average.

In August, Ontario’s mortgage arrears rate rose to 0.23%, reflecting a 44% year-over-year increase and standing 109% above the 10-year average. Nationally, the rate increased to 0.24%, representing a 20% annual increase and 10% above the 10-year average.