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 October, 2022?

Toronto’s October real estate market was a bit more active than September but that ain’t saying much.  We had 150 more sales in the city in October than in September, prices went up about 3% to $1.093M on average, but new listings dropped by 9%, with just 4,100 properties coming on the market.  All in all, a bit more active than the two year low in activity in September, but still very slow by historic standards for October.

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 October, 2022, we saw about 9% more sales when compared to last month, with just under 1,900 sales.

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Sales in October 2022
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MORE sales in October than September
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LESS sales this October than last October 2021

What’s it mean?

Last month we saw a two-year low in the number of sales in the city, with just 1,740 sales.  We’re up to 1,894 sales in October 2022, but that is still about half (49.9%) of what we saw a year ago in October 2021.  The market has absolutely stalled and we’re now playing catch up on all of the transactions that took place over the past two years, which was far above the historic norm.

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

When we look at just condo apartment sales, the story is very similar.  The condo market in Toronto in October saw about 2% more sales than September 2022, with 888 sales in October.  That slight increase is welcome given last month was our two year low, but we’re still at extremely low volume of deals for condo units in the city.  Our 888 sales in October 2022 is the second lowest in the last two years and we’re down about half from a year ago (October 2021) when we had 1,909 condo units sold in Toronto.

average sale price

In terms of prices, October, 2022 saw the average price for a home rise slightly to approximately $1,093,000.

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Average sale price in October 2022
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HIGHER prices in October than September
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LOWER prices this October than last October 2021

What’s it mean? 

October saw the third consecutive price increase in the city of Toronto, now at $1,093,097 on average.  This is despite September 2022 seeing a two-year low in the number of sales in the city.  Our current average sale price is up about $31,000 compared to last month, but we’re down about $29,000 compared to October 2021.  This is worth noting as there are lots of media stories about price changes and what is going on in the market, but most are focused on month over month changes and don’t recognize that we absolutely see fluctuations.  For example, if you bought a year ago, on average, your home is worth a bit less, but if you bought a month ago, on average, your home is worth a bit more.  

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

The condo market is diverging from the market as a whole this month, where after a couple of months of price increases, October saw the average price in the city for a condo unit drop by about 4%, down to $740,000 on average.  We hit an all-time high in March 2022 of $832,000 and a year ago (October 2021) our average price was, well look at that, $740,000.  So while we’ve seen some significant fluctuations over the the past year, on average the price that a buyer paid for a condo unit in the city a year ago is the same price as right now.

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 9% from last month, with 4,101 new listings in October.

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New listings in October 2022
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LESS new listings in October than September
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LESS new listings in October than last October 2021

What’s it mean? 

October is often the 2nd best month in the fall market (after September) in terms of new listings.  Two years ago, in September 2020, we had a all-time high of new listings hit the market of over 8,700 listings.  In October 2022, we had 4,101 new listings come onto the market in Toronto, down about 9% from last month (September 2022) when we had 4,491 new listings.  If we compare now to a year ago (October 2022) we are down about 20%, so we’re definitely at a lower than usual number of sellers wanting to come on the 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.  We had 2,189 new listings come on the market in October 2022, which is down about 7% from September.  A year ago (October 2021) we had 2,853 new condo units come on the market in Toronto, so this year is definitely slow when compared to a year ago.  Back in October 2020 we had almost 4,500 new condo units so we’re seeing far fewer condo owners thinking now is the time to list their unit for sale.

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

October is typically not as busy as September, but given September in Toronto was super quiet on the real estate front, that isn’t hard to achieve this year!   The length of time it took to sell dropped slightly in October, as did the average sale to list price ratio, meaning it felt a bit more competitive in Toronto this month.

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 October 2022, we saw the length of time it took for homes to sell go down one day, to 21 days on average.

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on average to sell in October 2022
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SHORTER to sell in October than September
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LONGER to sell this October than last October 2021

How did it feel?

In the early parts of 2022, the average days on market was between 9 days (a two-year low that took place in March 2022) and 15 days (in June 2022).  As of July 2022, we entered into average days on market of 20 days or more and it hasn’t changed considerably since then.  October saw teh average days on market drop by one day, down to 21 days on average.  A year ago (October 2021) it was 16 days on average, so the market is slower moving than it typically is, but a bit faster than the last couple of months.  It would have felt slightly more competitive by this metric.

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

When we look at just condo apartments, the average in October 2022 was 24 days on market.  That’s two days faster than last month, when it was 26 days on market.  Just like with the market as a whole, we’ve been in the 20+ days on market since July 2022, and we’re six days slower this October than a year ago.  It wasn’t a huge difference month over month (just two days) but it would have felt a bit more competitive and slightly faster paced if you were buying a condo unit in Toronto in October.

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 October, the average sale to list price ratio decreased slightly to 98.4%.

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Average sale to list price in October 2022
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LOWER ratio in October than September
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LOWER ratio this October than last October 2021

How did it feel?

The average sale to list price ratio in Toronto hit a two year high back in February 2022, when it was 113.5%.  That meant that sellers got 13.5% more than the price they listed for on the market, on average.  In August 2022, we hit a two year low of 97.7% in the city we rebounded in September, only to dip a little bit this month.  October 2022 saw our average sale to list price in the city drop 0.2%, down to 98.6%.  If you were buying or selling real estate in the city in October, you wouldn’t have likely felt it was much different from last month.  Sellers got about 7% less than they did a year ago (October 2021) when the average sale to list price was 105.6%, so it definitely feels a lot less competitive this October.

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 rose a bit in October compared to September.  Last month it was 97.8%, a two-year low, and in October, condo units sold for 98.6% of list price on average.  That’s about 4% less than what sellers could command back in October 2021, when the average sale to list price ratio was 102.3%.  If you were transacting on a condo unit in Toronto this October, it might have felt a bit more competitive than last month, but still quite relaxed on a historic basis.

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

We predicted that the overall average price in Toronto in October would drop, both for the market as a whole as for the condo market.  The market as a whole went up about 3% and the condo market dropped by about 4%, so we’re that’s a solid one out of two we got right.  Challenging times for the crystal ball!

When we look at the predictive stats for Toronto in October, we see signs that the average sale price should stay mostly flat in November.  Our sales to new list ratio is below 50% (meaning a buyer’s market), our active listings are down ever so slightly and our months of inventory decreased.  On the condo market side, the story is the same and arguably even a bit more indicative of a price increase in November.

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 October, we saw the SNLR rise to 46% so we are approaching a balanced market.

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Sales to new listing ratio in October 2022
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HIGHER ratio in October than September
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LOWER ratio this October than last October 2021

What does this predict?

The SNLR in Toronto has been below 50% since April 2022, when coincidentally (or not) we saw prices start to trend downward.  We saw it drop significantly in September to 38.7% but we’re back up almost 10% to 46.2% in October 2022.  That’s balanced market territory with perhaps a slight shift towards a buyer’s market.  At this time last year (October 2021) the SNLR was 73.5%, so we’re definitely seeing a more balanced market that is typical for the city.  A balanced or slight buyer’s market typically results in prices staying flat or decreasing next month and that is what this stat predicts on its own.

How will the condo market do?

The SNLR for the condo market rose in October to 40.6%.  It was 37.1% in September, so not a tremendous increase, but the condo market in Toronto is definitely still in a buyer’s market scenario.  A year ago, the SNLR for condos in the city was 66.9%, so it is a lot more balanced now.  A buyer’s market should result in lower prices as buyers take advantage of inventory sitting on the market to push on the price they pay.

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.

October saw the number of active listings decrease a bit, now at about 5,400 options for buyers.

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Active listings in October 2022
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LESS active listings in October than September
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MORE active listings this October than last October 2021

What does this predict?

Since May 2022, we’ve had somewhere between 5,100 and 6,300 active listings on the market each month.  This month (October 2022) we have 5,367 active listings, so a relatively typical level that we’ve been seeing over the summer and fall.  While that may be the case, during the same time frame, we’ve seen fewer and fewer sales.  The slight decrease in active listings shouldn’t really impact next month’s prices, but the overall number of lists is higher than we saw last October (2021) when we had 4,247 active listings in Toronto.  More active listings generally results in prices staying flat or even dropping, as buyers take advantage of the excess inventory so based on this stat, we should see prices in November stay pretty flat.

How will the condo market do?

The condo market saw a slight increase in the number of active listings, now at 3,131 active condo units for sale in Toronto.  That’s about 400 more than this time last year (October 2021) when there were 2,700 active listings of condo units in the city.  This stat predicts that prices for the condo market will stay mostly flat or perhaps decrease a small amount in November.

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.

October saw Toronto’s months of inventory decrease to 2.8 months.

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Months of inventory as of October 2022
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LESS inventory in October than September
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MORE inventory this October than last October 2021

What does this predict?

Toronto has traditionally had extremely low months of inventory, often under 1.5 months and it hasn’t been to uncommon to see it drop below one month.  This is another way of saying that we’ve had consistent levels of sales (demand) and whatever the level of listings (supply) have been, it hasn’t been enough to satisfy buyers before it would run out.  In October 2022, we have 2.8 months of inventory, which, while typical for the past few months, is quite high by Toronto standards.  On its own, a decreasing MOI should mean prices rise, but given we’re at higher levels than Toronto typically sees, it seems more likely prices will remain mostly flat next month. 

How will the condo market do?

The months of inventory for the condo segment dropped slightly in October, going from 3.6 months in September to 3.5 months in October.  That’s a far cry from the 1.4 months we had back in October 2021 and the condo market in the city is definitely far more balanced than we’re used to seeing historically.  On its own, this stat predicts that the average price for condos will stay mostly flat or perhaps drop a bit in November.

  • What’s it all mean?

There is a lot of information in the above charts and analysis and it’s worth taking a step back to understand what it all means.

If we look at the big picture as to what happened in October, the city was a bit busier, with 9% more sales than the previous month.  At the same time, it was a bit pricier, with the average price up about 3%.  Finally, there were fewer new listings in October (down about 9%) than in September.  More sales, higher prices, fewer new options – it doesn’t exactly follow the collapsing market theory you see in the media most days, does it?

When we look at how it felt to be buying or selling real estate in October, we see that it took a bit less time to sell (one day quicker to be exact), but sellers also took slightly less than they were willing to take last month (on average, 98.4% of their list price).  Despite the desire to simplify what is happening, it wasn’t a case of nothing is selling and buyers are getting tremendous deals.  Instead, the more nuanced review shows that it’s still a slow market, but it’s getting a bit quicker and sellers are taking less, but still mostly holding their ground on their list price.

Finally, the predictive stats for next month continue to be vague at best.  We’re in a balanced or slight buyer’s market when we look at the Sales to New Listing Ratio and the Months of Inventory, yet our number of active listings has dropped slightly compared to last month, meaning there aren’t tons of listings sitting on the market where sellers are getting desperate to sell.  When you combine the predictive stats, they indicate that November should be mostly flat in terms of prices, but we’ve seen these stats become unreliable due to fluctuating buyer sentiment.

The condo market isn’t fundamentally different than the market as a whole, but has its own twist on things in October.  Sales are up slightly, prices are down slightly and new listings are down slightly.  It’s taking a bit less time to sell and sellers are getting more when you compare the average sale to list price.  If we look to what is coming next for the condo market, it’s a bit more indicative of a price increase in November, though these stats are also less reliable as first-time home buyers (who typically buy condo units) are squeezed out by higher interest rates.

It has been an interesting fall market and November seems likely to continue that trend and we wouldn’t be surprised if November looked quite similar to October in many ways.  It may take until next spring before buyers and sellers come to grips with the new reality of real estate in Toronto and things become more settled.

Stay tuned for November’s market analysis and our next update on what is happening and what is coming next!