Last month provided more evidence that Canadian real estate markets are credit driven. Toronto Regional Real Estate Board (TRREB) data shows home prices made a massive jump in March. Was it fewer listings and strong sales that drove a typical home’s price almost $20k higher in a single month? Nope, it was just good old fashioned exuberant real estate buyers. New inventory climbed double digits while it was the weakest March for sales since 2009.
Toronto Home Prices Climbed A Whopping $20k In March
Greater Toronto real estate prices advanced sharply last month. A benchmark, or typical, home climbed 1.8% (+$19,700) to $1,113,600 in March. Prices are up 0.31% (+$3,400) compared to the same month last year. Annual growth remains tame but the monthly movement was shockingly large.
Greater Toronto Real Estate Prices
The benchmark price of a typical home across Greater Toronto.
Source: TRREB; Better Dwelling.
Greater Toronto Real Estate Saw The Weakest March Since 2009
One would think with face-ripping growth for prices, sales would also be on a tear. That wasn’t the case though, with existing home sales falling 4.5% to just 6,560 homes in March. That makes this past March the slowest since 2009.
Greater Toronto Home Sales Had The Worst March Since 2009
The number of existing home sales reported through TRREB for the month of March.
Source: TRREB; Better Dwelling.
Without context, it’s easy to dismiss the decline due to the Easter holiday restricting trading days in March (it usually happens in April). However, these sales are even lower than March 2020, when initial lockdowns occurred. People are buying Greater Toronto real estate in lower volumes than when they had physical barriers to purchasing. That’s… interesting, to say the least.
Greater Toronto New Inventory Climbed 15% While Sales Fell
Greater Toronto sellers showed up in slightly higher volumes. New listings climbed 15.1% higher to 13,120 in March. This helped push the sales to new listings ratio (SNLR) to 50% for the month, indicating a balanced market. This typically implies the market is priced right for demand, and generally price growth isn’t expected.
Greater Toronto existing home sales were unusually weak last month. Conditions even loosened, with new inventory rising to help alleviate any pressures. That didn’t stop buyers from bidding up home prices very sharply, like they were in the middle of a low rate squeeze. Typically low volume-driven price movements aren’t indicative of lasting value shifts, but Toronto’s growth has been heavily slanted upwards.
Experts might be mixed on where the market is heading this year, but one thing is clear—buyer exuberance is still alive and well.
