Backpedaling

In September, sales in the Toronto metro area edged down to 5,040 units, flat month-over-month, down 10% year-over-year, and 24% below the 10-year average. The decline was in line with the typical seasonal pattern, as sales volumes generally decrease from June through December.

In September, new listings rose sharply to 16,500 units, up 37% month-over-month. Listings remained 14% lower year-over-year, moving to 1% above the 10-year average. The increase was in line with the typical seasonal pattern, as sales volumes generally decline from June through December with a brief uptick in September.

In September, active inventory rose to 26,131 units, up 7% month-over-month. Inventory remained 11% lower year-over-year, while the gap above the 10-year average narrowed to 32%. The increase was in line with the typical seasonal pattern, as active inventory generally decreases from June through December with a brief uptick in September.

In September, the market balance indicator, measured by months of inventory (MOI), rose to 5.2. However, on a seasonally adjusted basis, it improved, with the gap from the long-term average narrowing from 63% to 56%. Historically, this level has been associated with annual price declines of approximately 7%.

Another market balance indicator, the sales-to-new listings ratio declined to 0.31 in September, standing 26% below the 10-year average. Historically, a ratio at this level has been associated with annual price declines of approximately 12%.

In September, the benchmark price for a typical property declined 0.9% month-over-month to $917,600, though median and average prices saw modest upticks. Prices were 4-5% lower year-over-year and 25-28% below 2022 peak levels.

Due to the discontinuation of previous datasets, a transition was made to new sources. Toronto Metro rental active inventory declined further in August. Available rental units fell to 11,998, down 10% month-over-month and 15% year-over-year. This drop was consistent with the typical seasonal pattern, as inventory generally decreases through the third quarter.

In August, the average rent in the Toronto Metro inched down to $2,571, declining 1.9% year-over-year and standing 15% below the 2023 peak. This slight decrease contrasts with the typical seasonal pattern, as rents generally rise from February through August.

New home sales fell to 907 units in August, down 38% from the 10-year average. The 12-month total increased to 8,729 units, but it remained 64% below the historical average.

In August, the benchmark price for new high-rise units declined to $1,041,918, 1% higher year-over-year and 17% below its peak. Meanwhile, the benchmark price for new low-rise units fell to $1,248,866, 15% lower year-over-year and 35% below its peak. Such steep changes over the past couple of months, however, should be interpreted with caution.

In August, housing starts contracted to 1,192 units, 65% below the 10-year average. Over the past 12 months, total starts declined further to 25,593 units, 32% below long-term norms.

Housing completions rebounded sharply to 2,362 units in August, though remaining 30% below the 10-year average. The 12-month total fell further to 25,416 units, 27% below the historical average.

In September, the lowest five-year fixed mortgage rate rose to 4.29%, while the lowest five-year variable rate fell to 3.25%, widening the spread to 1.04 percentage points.

Housing affordability in the Toronto metropolitan area improved in September, with mortgage payments on a newly purchased typical property accounting for 42% of median household income, down from 43% the previous month.

In August, Ontario’s unemployment rate edged up to 6.9%, 10% lower than a year earlier while remaining 1% above its 10-year average. Nationally, the unemployment rate held steady at 6.4%, falling 3% below its long-term average. Meanwhile, Toronto’s rate remained at 6.8%, moving 10% below its 10-year baseline.

In June, Ontario’s mortgage arrears rate rose to 0.33%, reflecting a 50% year-over-year increase and standing 170% above the 10-year average. Nationally, the rate decreased to 0.28%, representing a 22% annual increase and remaining 28% above the 10-year average.