What Trends Are We Seeing?

It is feeling like Groundhog Day in December. The market statistics for November 2023 are telling a similar story that we have seen for several months now. Based on year-over-year figures, number of sales are down, a Buyer’s market is in place and yet prices are not changing dramatically. The number of transactions within the Toronto Regional Real Estate Board (TRREB) were down six percent from November 2022 (4,507) compared to November 2023 (4,236). Despite the number of new listings in November 2023 being 16.5 percent higher than that of November 2022, average price in November 2023 remained essentially flatlined with a 0.3% increase compared to November 2022. The seasonally adjusted month over month average selling price was down 2.2 percent from October 2023 to November 2023. Average sale price by market segment breakdown shows a varying degree of adjustment when comparing both year over year and month over month figures. All of the percentage adjustments remain below 6.4 percent, illustrating segment stability as well.

What Lies Ahead?

With a significant number of mortgages commencing to renew between 2024 to 2026, we are seeing ample discussions about the “housing crisis” and what lies ahead for the Canadian housing market. The Sales-to-New Listings Ratio (SNLR) has been below 40%, firmly in Buyer’s market territory for several consecutive months. For perspective, we examine the historic SNLR ratio below:

 

While we note that the SNLR is falling to within the same territory that has been seen during past downturns in the housing market, it is notable that consumer behaviour shows a priority to meet mortgage obligations. With interest rates seemingly having hit their 22 year high of five percent and an expectation that interest rates will decrease next year, mortgagees are holding on.

Delinquency Payments for Auto, Credit Card and Mortgage

Delinquencies of mortgage payments are below their historical averages and the number of overdue payments is only a third of what they were after the 2008 financial crises.

As we enter 2024 Buyer confidence will likely be on the rise at a more aggressive than expected rate. Canadian economists have predicted a 100 to 300 basis point decline in interest rates next year, with some indicating the drops could start as early as April 2024. From a Buyer’s perspective the purchase price is a long-term commitment while the interest rate is a short-term consideration, and now is the time to come off the sidelines. From a Seller’s perspective, price stability is in place and potentially on the rise. Therefore those looking for a more immediate sale may benefit from entering the market now as opposed to waiting until we see a flood of listings on the market, or a market pause until we see buyers come back in full swing.

 

What is Happening with Sale Prices

 

Sale Price Comparison
Product Type Changes from November 2022 to November 2023 Changes from October 2023 to November 2023
Toronto GTA Toronto GTA
Detached +3.5% +0.3% -5.8% -1.2%
Semi-Detached +2.4% +2.9% -4.7% -0.8%
Townhouse -3.6% -0.7% -5.4% -4.3%
Condominium -1.7% +6.4% -1.2% +3.7%

 

Number of Transactions Trend

When comparing November 2023 to November 2022, we saw the following trend:

 

Categories November 2023 November 2022 Percentage Change
Number of Transactions 4,236 4,507 -6.0%
Number of New Listings 10,545 9,053 +16.5%
Number of Active Listings 16,759 11,911 +40.7%

 

When comparing November 2023 to October 2023, we saw the following trend:

 

Categories November 2023 October 2023 Percentage Change
Number of Transactions 4,236 4,646 -8.8%
Number of New Listings 10,545 14,397 -26.8%
Number of Active Listings 16,759 19,540 -14.2%

 

Looking into the different geographic pockets of Toronto and the GTA we notice the following changes in number of transactions when comparing November 2023 year-over-year to November 2022 and month-over-month to October 2023. The breakdown per area and product type are as follows:

 

Number of Transactions Comparison
Product Type Changes from November 2022 to November 2023 Changes from October 2023 to November 2023
Toronto GTA Toronto GTA
Detached -14.5% -5.3% -21.3% -9.6%
Semi-Detached 0.6% 11.3% -13.4% 0.9%
Townhouse -20.0% -5.3% -13.6% -1.4%
Condominium -8.2% -0.5% -6.6% -6.3%

Footnote: Source of statistical data is from the October 2023 and November 2023 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

 

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