Market Watch Q2

Sales Sputter as Buyers Weigh Options and Await More Rate Cuts

Despite the softer market conditions, sellers continued to hold firm on prices

With months of supply rising to 5.8, a record high for June periods, the condo market fell firmly into a buyer’s market. Market conditions also softened for detached homes and semis/rows/towns but remained balanced for both housing types during June with supply at 3.4 and 2.8 months, respectively.

Remarkably, condo apartment prices continued to hold up best among housing types, decreasing by just 1.5% from a year ago.

This was partly due to milder price increases for condos during the spring of 2023 compared to other housing types, and their relatively more affordable average price of $727,861. Detached prices decreased 3.2% annually to an average of $1.48 million, while average prices for semis/rows/towns declined 6.6% from a year ago to $993,606

Condo Sales Plunge and Listings Reach Another Record High

MLS sales of 6,213 homes in June represented the lowest monthly total since February and the lowest June result in 24 years.

Market conditions deteriorated the most for condo apartments during June, as sales dropped 28% annually and were 32% below their 10-year average. The year-over-year decline for condo sales more than doubled the sales declines for detached homes (-11%) and semis/rows/towns (-13%).

Active condo listings at the end of June reached a record high for the second consecutive month, surging 82% annually to 8,806 units — 72% higher than the 10-year average. Active listings were also up substantially for detached homes and semis/rows/towns, rising 55% and 43% above their 10-year averages, respectively.

In other words, as Active listings increased the number of sales decreased during the month of June in all property types.

Market Shifts to Lower-Priced Condos and Houses

While the 11% month-over-month dip in sales from May was generally consistent with seasonal trends, it was expected that activity would pick-up at least slightly from the low volume seen throughout the spring after the Bank of Canada’s first rate cut in four years.

However, with prices still high and only a modest 25 basis point decline in rates from their 22-year high, buyers remained cautious in anticipation of further rate cuts and amidst a growing supply of listings.

There was a large shift in condo sales activity towards lower priced units, with the share of units sold for under $600K rising to 39% from 29% last year. Sales for condos under $600K remained relatively stable with only a 2% annual decline in volume in June.

For low-rise homes, including detached and semi/row/town homes, the share of sales below $1 million increased while the share above $1 million decreased. The largest year-over-year increases in low-rise home sales were between $600-799K at 16%, while the largest year over- year decrease in sales was between $1.5-1.9M at 28%.

Sales and Price Declines Widespread Across Housing Types and Regions

Aside from an 11% increase in sales of semis/rows/towns in Toronto West, sales and median prices declined on an annual basis across every region and housing type in the GTA during June.

Market conditions for detached homes were stronger in the City of Toronto than in the 905 Region, with relatively milder declines in both sales and prices, while conditions were fairly consistent across the GTA for semis/rows/towns.

For condo apartments, market conditions were weakest in the City of Toronto, where sales dropped 29% from last year, and supply rose to 6.1 months. Conditions were particularly weak in Toronto West and Toronto Central, with supply reaching 6.9 and 6.3 months, respectively, and median prices down 5-6%.