What Trends are we Seeing?
From properties that are struggling to get a showing, to multiple offers on $2.0M+ properties and in the last 90 days seeing two +/-$5.0M sales which have been listed as long as 18 months the real estate market is as easy to predict as the weather. The Sales to New Listing Ration (SNLR) moved deeper into buyer market territory from June’s 38 per cent to July’s 33 per cent. Yet, sales increased from July 2024 relative to that of July 2023 by 3.3 per cent. Average prices continue to hold relatively stable with a 0.9 percent drop on a year-over-year basis for July.
What Lies Ahead?
What is becoming more of a certainty is the expectation of continued interest rate reductions by the Bank of Canada (B o C). The consumer confidence of upcoming interest rate reductions is being driven by numerous key economic factors.
From a gross domestic product (GDP) perspective the consensus is that aggregate GDP in Canada has been predominantly propped up by population, not productivity. Per capita GDP continues to fall on a quarterly basis.
The recent release of the unemployment figures on August 9th resulted in a hold of 6.4%. Of concern is the composition of employment in that a recent study revealed that one in four Canadians is public sector employed. While the strength of public sector employment opportunities isn’t without its benefit, the gap between public sector and private sector is growing larger indicative of a weakened self-sustaining economy.
Fear of recession in the United States coinciding with concerning U.S. unemployment figures has resulted in some economists predicting a 100 per cent chance of a U.S. interest rate reduction by the Federal Reserve on September 18th. This alleviates and Canadian concerns of potential currency discrepancies between the Canadian and U.S. dollar due to differing economic positions and monetary policy direction.
The concept of a mortgage cliff where we will see an abundance of duress sales in 2025 and 2026 is becoming less probably as interest rates move downward, those facing renewals from mortgages attained in 2020 and 2021 would have had to qualify under the stress test guidelines and we have seen a strong wage growth in Canada for many consecutive months.
Those buyers considering to purchase, especially if sizing up, should consider taking advantage of the over 18 per cent increase in supply of homes to choose from. Sellers contemplating a lifestyle change or looking to extract the equity from their assets should commence preparation to be ready to capture the many buyers who have been sitting on the sidelines for the last 12 to 18 months.
What is Happening with Sale Prices
| Sale Price Comparison | ||||
| Product Type | Changes from July 2023 to July 2024 | Changes from June 2024 to July 2024 | ||
| Toronto | GTA | Toronto | GTA | |
| Detached | +0.5% | -1.0% | -6.3 | -2.5% |
| Semi-Detached | -0.4% | -4.5% | -2.2% | -2.5 |
| Townhouse | -0.9% | -4.2% | -3.7% | -1.1% |
| Condominium | -0.5% | -5.7% | -1.9% | +0.2% |
Number of Transactions Trend
When comparing July 2024 to July 2023, we saw the following trend:
| Categories | June 2024 | June 2023 | Percentage Change |
| Number of Transactions | 5,391 | 5,220 | +3.3% |
| Number of New Listings | 16,296 | 13,755 | +18.5% |
| Number of Active Listings | 23,887 | 15,390 | +55.4% |
When comparing July 2024 to June 2024, we saw the following trend:
| Categories | July 2024 | June 2024 | Percentage Change |
| Number of Transactions | 5,391 | 6.213 | -13.2% |
| Number of New Listings | 16,296 | 17,964 | -9.3% |
| Number of Active Listings | 23,877 | 23,613 | +1.1% |
Looking into the different geographic pockets of Toronto and the GTA we notice the following changes in number of transactions when comparing July 2024 year-over-year to July 2023 and month-over-month to June 2024. The breakdown per area and product type are as follows:
| Number of Transactions Comparison | ||||
| Product Type | Changes from July 2023 to July 2024 | Changes from June 2024 to July 2024 | ||
| Toronto | GTA | Toronto | GTA | |
| Detached | +16.0% | -0.3% | -19.2 | -17.8% |
| Semi-Detached | +1.8% | +10.7 | -27.5% | -17.4% |
| Townhouse | +16.1% | +6.2% | -12.1% | -54.4% |
| Condominium | -1.3% | -0.4% | -6.9% | -3.6% |
Footnote: Source of statistical data is from the June 2024 and July 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
