Toronto Market Analysis

The Toronto Real Estate Board tracks statistics using geographic boundaries called MLS areas.  These areas typically correspond quite closely to counties or regions.  In the case of Toronto,  it is pretty much exactly the City of Toronto.  With just over 2.7 million residents, Toronto includes Etobicoke, York (Old York, not to be confused with York Region), North York, East York and Scarborough, plus of course central Toronto.

We know your market and here’s where we prove it.

Below you’ll find the latest statistics on what’s going on in the Toronto area and our take on what it means.  We do that by answering three questions for you.

  • What happened in the Toronto real estate market this past month?

  • How did it feel to be a buyer or seller in Toronto this past month?

  • What’s going to happen next with Toronto real estate?

Let’s get started.

  • What happened in Toronto in April, 2022?

Let’s review the big picture before we get into the details below. We saw the number of sales in Toronto drop by a significant amount in April and at the same time, our average sale price saw a relatively insignificant increase. In an indication of how confident sellers are feeling, we saw the number of new listings that hit the market drop considerably.

Let’s look at the specifics for what was going on in Toronto in our three big categories.

number of sales

If we begin by looking at the number of sales that happened in April 2022, we see they dropped 24% compared to last month, down to 3,023 sales.

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Sales in April 2022
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LESS sales in April than March
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LESS sales this April than last April 2021

What’s it mean?

April is traditionally when the spring market slows a bit after peaking in March and this year is following that same trend, but with a more significant drop in sales than we normally see.  April saw over 900 fewer sales in Toronto than March, and we’re down more than 1,500 sales compared to last April (2021).  It was two years ago in April 2020 that we saw the first impact of COVID on the Toronto real estate market, with a tremendous slow down in the number of sales.

Tale of two markets – what’s going on with condos?

When we look at just condo apartment sales, the story is very similar.  We had 1,488 sales of condo apartments in Toronto in April, and that’s down about 30% compared to March 2022.  If we look back a year ago, we had over 2,200 condo sales in Toronto and our current level of sales is more what we’re used to seeing in December or January.

average sale price

In terms of prices, April 2022 saw the average price for a home increase to approximately $1,243,000.

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Average sale price in April 2022
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HIGHER prices in April than March
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HIGHER prices this April than last April 2021

What’s it mean? 

April often sees prices remain more or less flat, with relatively small gains.  This year, we saw about a 2% month over month increase in the average price in Toronto, going up to $1.243M.  That’s a real dollar increase of just under $24,000 but given the high average price, it isn’t a significant change.  We’re up over 14% compared to this time last year (April 2021) but four of the last 12 months saw a lower average price than we have now, so it definitely wasn’t a consistent gain month over month.

Tale of two markets – what’s going on with condos?

The condo market diverged from the market as a whole in April, seeing a drop of 1.3% in April compared to March 2022.  The current average price for a condo apartment unit in the city is $820,835, which about 13% higher than a year ago.  Most of that gain took place in the past couple of months, with February 2022 seeing a spike up to $822K, after most of the year in the $700K range.

Number of New Listings

Our final source for what’s been happening this month in the Toronto real estate market is the number of new listings that came on the market, which dropped 6%, to 6,163 new listings.

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New listings in April 2022
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LESS new listings in April than March
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LESS new listings in April than last April 2021

What’s it mean? 

The approximately 6,200 new listings we saw in April is 379 fewer new properties than we saw last month, but still a considerable addition to inventory in Toronto.  So far in 2022, we have had 20,700 new listings hit the market.  In the same first four months of 2021, we had 22,900 new listings.  That is about 10% fewer new listings this year, but we need to consider that data along with the number of sales.  So far this year we’ve had 12,462 sales, which means about 60% of sales were new listings.  In the first four months of 2021, we had 16,178 sales, which means about 70% of the sales were new listings.  That is a significant difference and after years of low supply and high demand, we’re seeing a more balanced market.

Tale of two markets – what’s going on with condos?

When we look at just condo apartment new listings, we see a very similar story, with about a 6% drop in the number of new listings.  We had 3,203 new condo units hit the market in April 2022, which is about 190 less than last month.  A year ago, in April 2021, we had 3,519 condo units come on the market, so these numbers are a bit lower.  When we do the same comparison as to what happened in first four months of this year versus last year, it’s again similar to the market as a whole.  We had about 62% of our sales so far this year come from new listings, whereas last year it was 76% of the sales.  The condo market is more balanced than the market as a whole.

  • How’d it feel to be buying or selling in Toronto in April, 2022?

April is traditionally a continuation of the spring market in terms of activity and often feels similar to March.  This year, we saw the days on market rise by two days, up to 12 days on average.  At the same time, we saw the average sale to list price ratio drop about 5% down to 107.7%.  As such, if you were buying or selling in Toronto in April it probably felt calmer, with less of a frenzied feel on offer day.

Let’s look in detail at the two specific stats that tell us how it felt to buy and sell in Toronto this month.

Days on Market

One of the best indicators of how a market feels is how long homes remain on the market.  The quicker they fly off the market, the more frantic and stressful it can be for both sides.  While it may seem like that is always positive for sellers, make no mistake, it can be stressful when sellers receive lots of attention or offers quickly.  The fear of making a mistake and pressure to decide quickly is hard on both buyers and sellers.

In April 2022, we saw the length of time it took for homes to sell go up two days to 12 days on average.

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on average to sell in April 2022
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LONGER to sell in April than March
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LONGER to sell this April than last April 2021

How did it feel?

Last month saw the average days on market in Toronto hit a two year low of 10 days.  In April 2022, it went up to 12 days and while two days not seem like much, it’s a 20% increase in how long homes stayed on the market, which would have been noticeable.  We’re just one day slower than a year ago (April 2021) when the average days on market in the city was 11 days.  This stat is influenced by whether sellers are holding back offers or taking offers anytime and we did see a number of listings in April that failed to sell on their offer date and remain on the market a few days longer.  If you were buying or selling in April, things would felt a bit slower paced.

Tale of two markets – how did it feel if you were buying or selling condos?

When we look at just condo apartments, the story about days on market is very similar.  In March 2022, the average days on market for condo units in Toronto was at a two-year low of 10 days and now we’re at 13 days, which is a significant change.  We’re one day slower than this time a year ago (April 2021) when condo units took 12 days to sell on average.  The condo market felt a bit less hectic in April and was a bit slower than the market as a whole.

Sale to List Price Ratio

The other statistic that gives us a good idea of how it feels to buy and sell in this month’s market is the sale to list price ratio.  This is a percentage that tells us how close to the price the sellers wanted they actually received from buyers.  If the sale to list price ratio is 100%, it means buyers paid exactly what the sellers were asking for the property.  If it’s under 100%, then the buyers negotiated a discount and if it’s over 100%, then the sellers got even more than they were asking for as a sale price.

In April, the average sale to list price ratio dropped to 107.7%.

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Average sale to list price in April 2022
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LOWER ratio in April than March
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HIGHER ratio this April than last April 2021

How did it feel?

With almost a 5% real drop in average sale to list price, April definitely felt a lot less competitive if you were buying or selling real estate.  Just like the days on market, this stat is heavily influenced by the listing strategy that sellers use and as we saw more sellers opt to list at the price they wanted (rather than underpricing to encourage a bidding war), the average sale to list price drops accordingly.  This is the lowest the ratio has been so far in 2022 and more or less the same as what it was a year ago in April 2021.

Tale of two markets – how did it feel if you were buying or selling condos?

When we look at just condo apartments, the sale to list price ratio told the same story, with a drop from 109.8% in March to 105.9% in April.  That’s not the lowest this year as January 2022 was 105.4% but it is almost 4% less than just a month ago.  In April 2021 the average sale to list price for condo units in Toronto was 104%, so sellers are still feeling pretty confident compared to last year.  Buyers would have nonetheless felt like the condo market was a bit less competitive when it came to offering on units.

  • What’s going to happen in Toronto in May, 2022?

We predicted that the overall average price in Toronto in April would drop and instead it went up by about 2%.  While that may not be much compared the gains we saw in many months recently, it was nonetheless off the mark!  The predictive stats that we use to come up with our predictions are proving a bit unreliable during this shifting market.  We had also predicted that the condo market would see a drop in the average price and that did take place, going down about 1%.  We’ll take that as a win nonetheless!

When we look at the predictive stats for Toronto in April, we see signs that the average sale price should drop in May.  Our sales to new listing ratio dropped significantly, our active listings went up by over 1,000 properties and our months of inventory jumped to the highest we’ve seen since December 2020.  We are confidently predicting a price drop in May for both the market as a whole as well as the condo market.

Let’s take a more detailed look at the three predictive stats we have for what comes next in the Toronto market.

Sales to New List Ratio (SNLR)

Let’s start with an acronym!  The Sales to New Listing Ratio (SNLR) tells us how many of the sales we saw this month were new listings in the month versus existing listings that had been on the market from previous months.  It’s considered a strong predictor of what happens in the next month because it tells us if inventory is sticking around or selling quickly.

  • If the SNLR is around 50%, we have a balanced market, with sales equal to half the number of new listings coming on the market. A good amount of sales and a good amount of new options means reasonable price increases.
  • Over 50% is heading towards a seller’s market, as we have sales outpacing the new inventory coming on the market. In extreme cases, we can have an SNLR of over 100%, which means we saw more sales in a month than inventory came on the market, meaning next month is very likely to see a price increase.
  • Under 50% tells us that the we are headed towards a buyer’s market. The lower the SNLR, the more of a net increase in properties available the following month.  This means prices typically drop as buyers react to having lots of choices by pushing down the price they are willing to pay.

In April, we saw the SNLR plummet to 49.1%, meaning we’re in a balanced market for the first time in years.

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Sales to new listing ratio in April 2022
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LOWER ratio in April than March
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LOWER ratio this April than last April 2021

What does this predict?

The sales to new listing ratio has been dropping in Toronto since it hit a two year high in December 2021.  Our current SNLR of 49.1% is an 11.6% drop from last month and the fourth month in a row that we saw this ratio drop in the city.  We’re in a balanced market now, for the first time since October 2020, and if it continues, we may actually enter a buyer’s market!  A year ago, our SNLR was 62.5% and more importantly, we haven’t seen a consistently dropping SNLR like this for many years.  This ratio is a good indicator of how buyers are feeling about the market and it points to a very strong likelihood of a price drop in May.

How will the condo market do?

The SNLR for the condo market also dropped again for the fourth month in a row, now at 46.5%, compared to 62.9.% in March.  The last time we saw a SNLR this low was back in November 2020.  When the condo market was in freefall for the early stages of COVID (March 2020 to October 2020), it pulled the SNLR for the market as a whole down, but this time we’re seeing all segments of the market experiencing a drop in sales while new listings aren’t dropping at the same level.  Put simply, buyers are stepping back from the market and it appears that we will see another average price drop for condo units in May.

Number of Active Listings

As we turn to active listings, we need to be clear about what that means.  The number used for active listings is the number of actual, currently for sale properties at the end of the month.  This number is therefore comprised of the older listings already on the market at the start of the month, plus any new listings that didn’t sell in the month, less any older or new listings that did sell before the end of the month.

April saw the number of active listings increase significantly to 4,732 options for buyers.

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Active listings in April 2022
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MORE active listings in April than March
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MORE active listings this April than last April 2021

What does this predict?

April 2021 was the fourth month in a row that the number of active listings in Toronto increased, and the third month that they went up significantly.  In January 2022 we had about 1,900 active listings.  In February we had about 2,800.  In March it went up to about 3,700 and in April it is now up to over 4,700 properties on the market.  At a time when mortgage rates are increasing significantly, about a thousand sellers a month are being added to the existing stock.  This strongly indicates we will see a price drop as buyers have many more choices, thereby reducing competition.

How will the condo market do?

The condo market followed the market as a whole, with more active listings for the third month in a row.  After hitting a record low of active listings in January 2022 of about 1,100 units, we had over 1,500 in February, just under 2,000 in March as of April 2022 we have over 2,600 condo units for sale in Toronto.  We expect this increase in available inventory will result in an average price drop for the condo market in May.

Months of Inventory (MOI)

Finally, let’s look at the Months of Inventory in Toronto.

This statistic tracks how long it would take for all properties on the market in Toronto to sell if we stopped having any new listings.  The higher the MOI, the more of a buyer’s market, the lower the MOI, the more of a seller’s market.  Somewhere between three to four months is considered a balanced market.

April saw Toronto’s months of inventory jump up to 1.6 months.

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Months of inventory as of April 2022
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MORE inventory in April than March
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MORE inventory this April than last April 2021

What does this predict?

After five months of staying at around 0.9 months of inventory, April saw a huge jump in the levels of inventory in the city, goin up to 1.6 months of inventory.  This is a 78% increase compared to March and it is the highest levels we’ve seen since December 2020.  Make no mistake, we are officially in a different market than we’ve seen in the last year and a half.  If rising active listings continue in May, then we should see the MOI stat go even higher next month and we’re definitely seeing a price drop based on this statistic.

How will the condo market do?

The months of inventory for the condo segment actually doubled month over month, going from 0.9 months in March 2022 to 1.8 months in April 2022.  That’s the highest we’ve seen for condo units since December 2020 and a dramatic increase from what we’ve seen since November 2021, which was the last time we had over one month of inventory for condo units in Toronto.  This stat strongly indicates we will see a price decrease in the condo market in Toronto in May.

  • What’s it all mean?

The latest stats for Toronto clearly shows the market has shifted from a seller’s market to a balanced market in many regards.  If interest rates continue to rise and government policies designed to slow real estate price growth continue to be implemented, we may very well soon be in a buyer’s market in Toronto!

We strongly expect to see the average price drop in Toronto in May and it may be a significant (5% or more) drop based on what the predictive stats are telling us.  As buyers continue to struggle with rising mortgage costs, any drop in the average price will solidify consumer sentiment that the real estate frenzy we’ve been living with for a number of years is done.  It’s a challenging time to know what to do and as we help our clients navigate buying and selling in the city and beyond, we’re constantly updating our thinking.  Stay tuned for our latest thoughts and get in touch if you need help in what is the most dynamic market we’ve seen in years.