What Trends are we Seeing?
With the Sales-to-New Listing Ratio (SNLR) for residential homes at 40% we continue to see a buyer’s or balanced market. Note that this is an uptick from prior months of July and August where the SNLR was definitively a buyer’s market. The number of transactions in August 2024 decreased to that of August 2023 by 5.3%. Notable is that there was an increase in the number of transactions from July 2024 to August 2024 by 0.6 per cent. All property types in the GTA saw reduced sales relative to August 2023 with condos leading the way with an 11.4 per cent decline, townhouses following with a 6.1 per cent decline and semi-detached homes transactions down by 3.4 per cent.
Some buyers are choosing to come off the sidelines now if not bound by affordability issues to capture some negotiation power today in exchange for higher interest rates with an expectation of escalating prices tomorrow. 70 per cent of homes sold during August 2024 in the GTA were for less than asking (compared to 60 per cent in August 2023), 27 per cent of homes sold were above asking and three percent of homes sold were at seller’s asking price. Compared to August 2023, average sale price was down 0.8 per cent.
What Lies Ahead?
It happened again; interest rates went down another 25 basis points on September 4th, 2024 with the new rate being 4.25%. But is it enough?
From a gross domestic product (GDP) perspective growth was achieved for Q2 at 2.1 per cent, however, it came with numerous caveats. Most notable is that the per capita GDP has been declining for five quarters in a row and seven of the last eight quarters negative. Concerning the Bank of Canada is that of the 2.1 per cent growth it was government spending that drove 80 per cent of it.
Within the GDP figures household investments slowed with residential investment falling to 1.9 per cent in Q2, making the most significant drop in over a year. Leading the decline was new construction (-1.6 per cent), renovations (-2.6 per cent) and ownership transfer costs (-1.1 per cent).
Unemployment rose to 6.6 per cent in August despite adding 22,000 jobs to the country’s economy. This is the highest the unemployment rate has been since May 2017 excluding pandemic years. Hiring is not keeping pace with population growth. Driving the unemployment figures are youth and new entrants to the labour force.
Job security is not a concern for most as we have yet to see a pick-up in layoffs. With job security in place for the 25 and up demographic and wage growth at five per cent, money is in the hands of would-be buyers. Private sector employment rose for the first time since April 2024 with a gain of 38,000 positions. A welcome change to the predominantly public sector job growth that has been propping up employment figures of late.
Interest rate expectations continue to be downward. With two rate adjustments left in the calendar year few would argue there won’t be a downward adjustment to the bank rate in each. Growing calls for the October 2024 interest rate adjustment to be 50 basis points as opposed to a more conservative 25 basis points. Many economists are expecting a bank rate of between 2.5 per cent and 3.0 per cent by the end of 2025.
For the qualified buyer that can date today’s higher interest rates before they drop and marry the purchase price, it is time to come out and play and reap the benefits years from now. For the seller with their property on the market or considering it, hold strong to the value you have in your property for a price that works for you or be patient as greener pastures are around the corner.
What is Happening with Sale Prices
| Sale Price Comparison | ||||
| Product Type | Changes from August 2023 to August 2024 | Changes from July 2024 to August 2024 | ||
| Toronto | GTA | Toronto | GTA | |
| Detached | +8.3% | -3.3% | +2.9% | -1.3% |
| Semi-Detached | -2.2% | -3.9% | -4.0% | -1.6% |
| Townhouse | -18.4% | -2.6% | -6.6% | -1.2% |
| Condominium | -14.8% | -4.4% | -8.9% | +0.5% |
Number of Transactions Trend
When comparing August 2024 to August 2023, we saw the following trend:
| Categories | August 2024 | August 2023 | Percentage Change |
| Number of Transactions | 4,975 | 5,251 | -5.3% |
| Number of New Listings | 12,547 | 12,358 | +1.5% |
| Number of Active Listings | 22,653 | 15,492 | +46.2% |
When comparing August 2024 to July 2024, we saw the following trend:
| Categories | August 2024 | July 2024 | Percentage Change |
| Number of Transactions | 4,975 | Â Â 5,391 | -7.7% |
| Number of New Listings | 12,547 | 16,296 | -23.0% |
| Number of Active Listings | Â 22,653 | 23,877 | -5.1% |
Looking into the different geographic pockets of Toronto and the GTA we notice the following changes in number of transactions when comparing August 2024 year-over-year to August 2023 and month-over-month to July 2024. The breakdown per area and product type are as follows:
| Number of Transactions Comparison | ||||
| Product Type | Changes from August 2023 to August 2024 | Changes from July 2024 to August 2024 | ||
| Toronto | GTA | Toronto | GTA | |
| Detached | +8.3 | -3.3% | -19.5% | -6.0% |
| Semi-Detached | -2.5% | -3.9% | -22.2% | -2.0% |
| Townhouse | -18.4% | -2.6% | -17.2% | +87.5% |
| Condominium | -14.8% | -4.4% | -2.3% | +1.4% |
Footnote: Source of statistical data is from the July 2024 and August 2024 Market Watch report of the Toronto Region Real Estate Board (TRREB) MLS.
A – Monthly Percentage Change in the Number of Units Sold
B – Month Over Month Average Price Percentage Change
C – Seasonally Adjusted Month Over Month Average Price Percentage Change
D – Monthly Percentage Change in Average Sale Price
