What’s happening in the Toronto and GTA real estate market right now? For months, all we heard about were record-setting prices, offer dates and crazy bidding wars. Then, at the end of April, that shifted with a month-over-month drop in sales. That trend continued in May with 11,951 sales compared to 13,663 in April and 15,652 in March.
However, sales were still well above the May average, and average prices haven’t been impacted. According to TRREB, “despite a slight ebb in sales over the last two months, market conditions remained tight enough to push the average selling price to an all-time record in May.”
Does that mean the market is finally cooling?
This article from Better Dwelling says yes: a cooling is being observed Canada-wide. But what does that look like in the 416 and the 905? We talked to five property.ca experts to get their take:
Bayan Qandil, Property.ca CEO and Chief Technology Officer weighs in on what he's seen on condos.ca and property.ca, our two highest-traffic real estate portals.
Chief Financial Officer David Purewal shares insights from an analysis of recent transactions.
VP of Sales Brendon Cowans, Broker Allie Brogan and Sales Representative Zach Lahartinger share their experiences on the ground, talking about what buying and selling in the city is looking like right now.
/f/70665/5000x2000/8b92af79f2/untitled-design-24.png)
From left to right: Bayan Qandil, Property.ca CEO and Chief Technology Officer, Allie Brogan, Broker, Property.ca, Brendon Cowans, VP of Sales, Property.ca, Zach Lahartinger, Sales Representative, Property.ca, David Purewal, Chief Financial Officer, Property.ca
Q: What does current site data tell us about market trends?
Bayan: We're starting to notice a slowdown in site visits, along with the popular search terms being used on Google. If you compare site sessions and user signups since the beginning of the year, you’ll see the typical pick up and drop: in January and February we had around 1.7 million users and 2.2 million site sessions, and in March that went up to 2.1 million new users and 2.8 million site sessions. But in April, those numbers started to drop in line with Canada wide-sales statistics. In April we had 1.9 million new users and 2.5 million site sessions, and May saw 1.8 million new users and 2.3 million site sessions.
“Condos for sale Toronto” and similar terms are also following the same pattern. However, you have to put these numbers in perspective: the activity aligns pretty closely with typical market trends and previous years (if you ignore 2020, which was an anomaly). The activity in March was much higher than usual, which is making the April and May drops seem much worse.
People are panicking and saying “oh no, the market’s dropping!” But that's really not the case. If you compare May with February and March, then yes, it’s evident a lot less is happening. But if you compare the last couple of months to the same period in 2018 and 2019, you’ll see the traffic behaviour is pretty normal.
Q: Are property.ca agents seeing signs of a cooldown in their day-to-day experiences?
Brendon: On properties where you'd expect to see 5, 10 or even more offers, now you’ll probably get about 2 or 3. There are fewer showings being booked: instead of the expected 2 or 3 showings a day on certain properties, like earlier this year, there might be 3 or 4 in a week. We also need to take into consideration the time of year as a contributing factor: the fantastic weather we've been having and the proposed plans for a full reopening may help explain why there was less going on in what is typically a busy month. Also, a lot of the pent-up demand from 2020 was satisfied earlier in the year, leaving fewer buyers, especially in the face of low population growth due to lack of immigration.
But remember, what we're calling a “cooling” is still pretty hot. We’re still setting records for average price. Deals are happening, and the market continues to favour sellers. But I do expect the number of days properties stay on the market will continue to increase.
Allie: It’s hard to make generalizations about cooling: the Toronto market is incredibly segmented, with each neighborhood and even certain buildings as their own microcosms. Lumping it all together doesn't paint an accurate picture. But I have noticed an overall difference: it feels like some buyers took a step back in April, due to buyer fatigue or the good weather or the new stress test.
However, units with outdoor space, decent square footage and a great layout are still in high demand. Last Thursday, we had 15 offers on a 2-bedroom with a beautiful balcony and a great view at a price point under $1M. Where I’m seeing the difference is with the “not-that-special” units. Three months ago, they were getting snapped up because supply was low. But now that we're seeing a bit of an uptick in supply and not quite as many buyers, they’re taking longer to sell.
But the market can change really fast, and I’ve seen a big shift just in the last few days. If you had asked me a week ago, my answer would have been different than it is now. As things have cooled slightly, we’re starting to see people who stepped away from the market a month or two ago coming back. In fact, we sold a listing last week that had been on the market for 28 days, and we had multiple offers with no price reduction or relisting to increase momentum. So from what we’re seeing, demand and buyer confidence just took a positive turn once again.
Zach: I agree that you can't make blanket statements. Product matters more than anything else right now. If it's unique and has great features, it's still selling fast. And the segment, the neighborhood, and even the building are all factors as well. For properties in the $2M+ range there's a lot less elasticity to the market: we're still seeing really aggressive pricing, and those prices are still being paid.
Things are dramatically different from neighborhood to neighborhood: the stats we’re getting from TRREB just aren't granular enough. For example, Liberty Village and City Place are within a kilometre of each other, but they couldn’t be any more different. So when you see a stat that says price per square foot in C01 has dropped, it doesn't give you the whole picture. Buildings like 75 Portland and 111 Bathurst are really hot because they have unique products, while an older, more generic building right across the street may have stagnated.
The best way to get a sense of the market is to talk to an agent who has a deep understanding of a specific area. For example, we just had two listings: one at 18 Valley Woods Road at the 401 and DVP, and one at 707 Dovercourt. These areas function completely differently: average days on market in C13 for a condo is 33 days or more, whereas at 707 Dovercourt, which is in C01, averages 13 days. So that's where we're starting to see the “cooling” the media is talking about: hotspots are still hot, but other areas are not moving as quickly.
Q: Is Property.ca seeing fewer transactions as a brokerage?
David: We are seeing fewer written deals (the ones that haven't closed yet) coming in, and will see the full financial impact of that in two to three months as those sales close. Right now we're still seeing the results of February and March sales – which were significant. But based on what's coming in now, a bit of a slowdown is actually a good thing. The market is still strong, it just isn't moving at the same breakneck speed as it was in February and March. Realistically, that speed was untenable.
Q: What do you expect to see in the coming months?
Brendon: I think we're trending towards a more balanced market. But I also think that could change yet again once things reopen and immigration is back in full force. Keep in mind that we’re still dealing with a housing shortage. And if you pair reopening with fall – a time the real estate market typically picks up – you could see the number of transactions start to surge again.
Want to know if now is the right time to buy or sell?
Whether you’re looking for some general guidance as you start your search, or you need market insights to help you navigate all of the GTA’s micro-markets, talk to a Property.ca agent. They have the in-depth knowledge you need to make a smart move that’s right for you.