Week 148: Toronto’s Listing Supply Tanks Across the Board Severely Limiting Buyers’ Choices

Looking back at this time last year, you can see some similar numbers across the board, but what stands out is the lack of condo sales this past week compared to last year.

Only 12 sales this week vs 42 same week last year.

Does that signal anything? It can’t be the foreign buyer ban, as these sales are for the final week of December.

I mean, it’s not an anomaly. Sales have been down each week when compared to last year. So it wasn’t unexpected, but each other community I’m tracking below managed to maintain a similar holiday week. (continued after chart)

Urban Markets: Downtown & Surrounding Areas
House Average Price: $2,083,857
House Median Price: $1,737,000
252 Active Listings
7 Firm Sales This Week
Months of Inventory (MoI) ~ 0.94 (down from 1.60 last month)
Average Days on Market ~ 31.57

Condo Average Price: $720,117
Condo Median Price: $656,000
1139 Active Listings
12 Firm Sales This Week
MoI ~ 1.81 (down from 2.24 last month)
Average Days on Market (DOM) ~ 30.5

I’ll continue looking at condos over the coming weeks to see if I can spot a trend, but it’s business as usual for now.

Again, this is why weekly reporting matters. You won’t learn this until the first week of February if you wait for monthly stats to come out. Too late!

I also took some time to sift through all of the available listings on the Toronto MLS system to ensure I’m not missing any Power of Sale properties that people still keep discussing.

As you know, a power of sale is a sale forced by a lender when the borrower, aka homeowner, defaults on their mortgage. This would happen after many months of missing payments and perhaps even some negotiation with the lender to come to an agreement. Only in the most extreme cases do we see power of sales.

Guess how many houses and condos are in Toronto under power of sale. (continued after chart)

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $6,316,667
House Median Price: $3,750,000
81 Active Listings
3 Firm Sales This Week
MoI ~ 1.65 (down from 2.62 last month)
Average Days on Market ~ 37

Condo Average Price: $1,792,150
Condo Median Price: $1,215,000
136 Active Listings
0 Firm Sales This Week
MoI ~ 2.14 (down from 2.84 last month)
Average Days on Market ~ 46.83

There are 8. Well, seven, as one of them is sold conditionally. Do you know how many listings there are in the same market area? There are 4667 as of 10:36 am Tuesday, January 3rd.

So 0.17%

Do you know how many mortgages in Ontario are in arrears? 1,318 of over two million registered mortgages, so 0.06% as of the end of September 2022. Now, that should increase as we get more updated figures, but the numbers are so small (albeit increasing slightly) that they’re not worth talking about as some looming trigger event. Worth watching, yes, but nothing is alarming here.

So then, let’s talk about the number of new condos that are scheduled to be completed in 2023. These are pre-construction condos bought from 2016 onward that are in various stages of construction. A recent globe and mail article said there would be 32,000 condos “hitting Toronto” in 2023. Immediate spike in blood pressure after reading that, right? (continued after chart)

Leaside, Davisville, Yonge & Eglinton
House Average Price: $1,732,300
House Median Price: $1,555,000
22 Active Listings
0 Firm Sales This Week
MoI ~ 0.75 (down from 0.91)
Average Days on Market ~40

Condo Average Price: $731,000
Condo Median Price: $719,500
85 Active Listings
0 Firm Sales This Week
MoI ~ 1.61 (down from 2.52 last mth)
Average Days on Market ~ 60

There are many condos sold with expected occupancy in 2023, but the majority were delayed due to Covid, so the completion of many has been pushed back and staggered, so there won’t be nearly as many ready for occupancy as the article would have you believe.

Also, remember that most of those condos ready for occupancy are sold. And the majority of original buyers will be able to afford them, close on them and either move in or rent them out. And with over 400,000 new permanent resident Torontonians, there will be more than enough demand to scoop up those rentals.

Having 32,000 condos complete in one calendar year does not mean there will be 32,000 condos hitting the market simultaneously.

There will be a percentage of them who are in trouble and will be sold before occupancy. (continued after chart)

Birch Cliff
House Average Price: $1,285,000
House Median Price: $1,285,000
16 Active Listings
1 Firm Sales This Week
Months of Inventory (MoI) ~ 0.89 (down from 1.01)
Average Days on Market ~ 39

Some buyers can no longer afford them, so they’re looking to unload them on the offline assignment market.

There’s blood in the water there. So if you are cash-heavy and are looking for decent prices, then the assignment market is for you.

Shifting gears into the resale market, you can see that supply tanked in most areas. We’re talking serious, Q1 2022 levels here.

The months of inventory (MoI) for houses decreased from 1.60 last month to a slim 0.94 this week, and the MoI for condos decreased from 2.24 to 1.81 in Toronto’s urban communities. That’s LOW. Like extreme seller’s market territory here.

So what’s the rest of the month going to look like? It depends on what happens at the next rate announcement on the 25th. That’ll set the tone for the next month or so.

If there is a basic 25bps increase, things should move along as they have been. Slow but predictably steady. If they do a mega raise, buyers will go into hiding, and some defaulting will happen. But if they do a normal increase and announce a halt for a little while, just wait; buyers will be out and making bigger-than-usual offers.

But at the end of the day, we’re not day-trading real estate here, so try and block out the noise of some creators out there who LOVE to highlight the plight of some groups of buyers who found themselves on the wrong side of their investments and focus on making strong long term decisions.

With The Spring Team’s help, of course.

Kingston Rd Corridor to Highland Creek
House Average Price: $725,000
House Median Price: $725,000
24 Active Listings
1 Firm Sales This Week
Months of Inventory (MoI) ~ 0.54 (down from 1.21)
Average Days on Market ~ 7

Condo Average Price: $680,000
Condo Median Price: $680,000
36 Active Listings
1 Firm Sales This Week
MoI ~ 1.63 (down from 2.30)
Average Days on Market ~ 17

Any questions? The entire team and I are here to help. Email/comment/text/smoke signal, and we’ll get back to you.

Have a wonderful day, and I’ll see you next week. Don’t forget to subscribe to the blog so you get this in your inbox asap, and we’ll see you on Youtube!

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