Toronto housing market sees lowest sales in 30 years
Toronto home sellers are making major price cuts this spring as economic uncertainty and rising listings tip the balance of power toward buyers.
In April, 66% of homes in Toronto sold below the asking price, the highest share for the month in over a decade, according to data compiled by real estate agent Robert Marsiglio of online brokerage Valery.ca. Homes sold at an average of 98% of list price, the largest April discount since the onset of the pandemic.
A series of price drops illustrates how common discounts have become. A four-bedroom near Riverdale Park sold for nearly $100,000 below list, a Trinity Bellwoods semi went for $50,000 less, and a duplex by Lake Ontario closed $60,000 under asking.
The shift is occurring during what’s typically the most active period of the housing year. But this time, the spring season collided with growing economic instability fuelled by a global trade war initiated by the United States, Canada’s largest trading partner. The uncertainty has discouraged many prospective buyers, even as sellers continue listing more properties.
“There’s no more FOMO,” Marsiglio told Bloomberg. “It’s just improving for buyers relative to sellers. That power balance is still shifting to buyers. It’s probably in the relatively early days of it.”
According to Royal Bank of Canada (RBC), Toronto’s housing market now favours buyers more than it has at any point since the 1990s, a period marked by steep price corrections. In April, Toronto’s benchmark home price fell 5.4% year over year to $1.01 million, based on Toronto Regional Real Estate Board data.
Robert Hogue, economist at RBC, noted that home sales in April were the lowest outside of the pandemic in 30 years.
“There’s a lot of potential buyers who would otherwise be in the market who just don’t want to commit to a big financial decision when there’s so much up in the air with the outcome to the trade war,” he said.
Hogue also forecast continued price softness in Toronto and other major cities like Vancouver, where similar supply-demand imbalances are emerging.
For some households, however, waiting isn’t an option. Vienna Waddell and her husband, with a baby at home, needed more space and found a three-bedroom bungalow in the suburbs. But they had to sell their condo on Toronto’s lakeshore to make the move. Their unit ultimately sold for $50,000 under their asking price.
“In order to buy, we needed to sell,” Waddell said. “We found a home we really liked in a perfect location and I wanted to jump on it.”
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Tom Storey, a Toronto real estate broker, said he’s never seen the market this tilted in favour of buyers, outside the pandemic. This spring, many of his clients are submitting offers at least 5% below asking and walking away if sellers don’t show flexibility.
“Buyers are holding their foot down,” Storey said. “Sometimes the seller just goes, ‘No, I’m not responding; this is way too low.’ And the buyer just goes, ‘All right. I have five other options. I’ll go try on the next one.’”
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