There have been a lot of stories in the media about how we have record levels of inventory in Toronto’s real estate market these days.
As of today, there are just over 10,000 properties for sale in Toronto.
A year ago, as of the end of July, 2023, we had about 5,800 homes on the market in the city. That means that now we have almost double the level of inventory of properties for sale that we did at this time last year.
Despite that significant increase in the supply of homes, you may have noticed that politicians are not shaking each other’s hands and congratulating themselves on a job well done. It seems unlikely that we suddenly have shy politicians who don’t like to take credit for effective management of the housing crisis.
In order to see why the higher levels of inventory don’t mean we’ve solved our affordability issues in Toronto or the GTA, we need to look a little deeper into the market. When we do so, we see that more overall doesn’t translate into more of what we need.
First, the big picture.
As we write this at the start of August, 2024, we’ve got over 10,000 properties listed for sale in Toronto. That’s a lot more than we have had historically and the number of active listings in the city has gone up every month so far this year.
Let’s look at what type of properties are actually on the market to get a better understanding and as we do, let’s identify some important insights about what the data tells us.
Want a condo? We’ve got lots.
When we break down the inventory on the market, it looks like this.
- 2,962 freehold properties for sale in Toronto
- 7,089 condo properties for sale in Toronto
That works out to about a 30/70 split between freehold homes such as detached, semi-detached and townhomes and condo properties such as condo apartments and condo townhouses.
Here’s our first insight into the market as it stands right now. Yes, we’ve got higher overall levels of homes for sale, but 7 out of 10 of places on the market are condo properties. Good news if you want to buy a condo, but less thrilling if you’re looking for a freehold property.
Let’s keep going deeper to see what we find.
We have over 7,000 condo properties for sale in the city, but if you were thinking that means lots of condo townhouses, you’d be disappointed.
Almost 6,200 of the condo properties are condo apartment units, and close to half of those condo units (about 3,000 of the listings) are one bedroom units. Another 200 hundred are studio apartments with no separate bedroom, so more than half of the units for sale are pretty small.
If you’re looking for a larger unit with more bedrooms, we have about 2,500 two bedroom condo units for sale right now. If you did some quick math and said that doesn’t leave much of the available inventory to be comprised of three bedroom units, you’re spot on. Less than 500 of the 7,000 condo units for sale are three bedroom units.
Oh, and if you’re looking for a condo unit with six bedrooms, you’re down to just one option at 1 Bloor West, which is currently for sale at just under $35 million. We’d say at that price you should buy two, but there’s just the one in the city.
Here’s our next insight from looking deeper into the data. While there may be a lot of condo units for sale, the majority of them (over 50%) are one bedroom units or even studio apartments. This lack of options for families means that while condo apartment units are the most affordable option in the city, they don’t really work for most families. Add in the need for a parent (or two) to work from home and even the two bedroom units are rarely suitable for a family for long.
Let’s dig deeper into the freehold market to see what’s available there.
Almost all freehold homes for sale are detached, semis or townhouses.
We actually could have titled this section a bit differently and said that almost all freehold homes for sale in Toronto right now are detached houses. Full stop.
When we dive into the numbers, over 2,100 of the almost 3,000 freehold homes for sale now are detached homes. This is largely a function of the fact that detached homes make up the majority of freehold homes in the city of Toronto. Due to zoning constraints, up until recently many parts of the city were zoned single-family residential and many areas had only detached homes permitted.
When we look at semi-detached homes, just 418 are for sale in the freehold market right now. Again, this is a reflection of our housing stock. While some neighbourhoods have lots of semi-detached homes, many parts of the city do not.
The only other sizeable portion of the freehold market for sale right now are townhomes, but we say sizeable with a bit of tongue in cheek, as less than 250 of the freehold properties for sale right now are townhomes. Given that townhomes are typically the most affordable type of freehold home one can buy, this means that less than 10% of the housing stock available in the freehold market is “affordable”. We put that in quotes as the freehold townhome market ranges considerably in price, going from around $750K to almost $7M.
The insight from the review of the freehold market right now is that detached homes are actually the most likely home for someone to buy. 70% of the freehold market is detached houses, compared to semi-detached houses, which make up 14% of the market. Townhouses comprise just 8% of the market for sale right now. The remainder of the freehold market are a mix of duplexes, multiplexes, vacant land and other less common types of housing.
Let’s finish up our review of the freehold market by taking a look at what lower budget buyers have for options.
So, you want a freehold home for less than $1M?
It’s great that we have almost three thousand freehold homes for sale but the question is whether there are many that are actually listed below the $1M mark. This is an important threshold for many buyers as over that point, CMHC insurance is not available and through most major lenders that means you need to have at least 20% down for the purchase.
The review of the homes available in the freehold market for under $1M reveals some surprising aspects, as well as some of what we expected to see.
First off, lots of the freehold homes for sale in the city are in fact listed at over $1M. This isn’t surprising given a freehold home of your own in the city remains highly prized. There are a total of 486 freehold homes for sale for below $1M, which means about 1/6th of the freehold market is under that threshold.
When we break down what homes are available under $1M, there are some surprising results. It might seem logical that we’d see more townhomes, some semi-detached properties and very few detached houses in the sub-$1M price range.
In fact, just 71 of the 250 townhomes that are on the market are listed below $1M, so if you are looking for more options for a sub-$1M freehold home, you need to move up the property ladder.
If you’ve got a budget of $1M, you have about twice as many semi-detached options as you do townhouses, with 138 semis on the market.
The big surprise comes when we looked at the number of detached houses below $1M, where we get to double the number available again! That’s right, the holy grail of Toronto real estate, a detached freehold house, is twice as available in the below $1M market as semi-detached houses, which are twice as prevalent as townhomes.
The big insight that we pulled out of this review of the lower priced part of the freehold market is that the “best” type of home, a detached house, is actually the one type that you have the most amount of choice in for under $1M in Toronto.
Put another way, if you’re looking for a freehold home under $1M, you’ve got townhomes making up 15% of your choices, semi-detached making up 30% of your choices and detached houses making up 55% of your choices. While that may make sense due to the numbers of each type of homes across the city, it is still something that we only see when we look deeper into the numbers.
The Toronto real estate market is one of the most competitive in the world and if you’re thinking about buying, selling – or both – than you need to work with agents who understand what’s going on in a very detailed sense. If that sounds appealing, get in touch with us to talk about next steps!
