In this comprehensive analysis, we highlight four key observations that shed light on the current state of the real estate market.
1. The Sales Activity has been Decreasing
In May 2023, there were just over 9,000 sales, whereas September had 4,600 sales. That is a 50 % drop. Now typically, we would see an uptick in sales in the month of September, because that would be the beginning of the fall real estate market. However, we did not see that. The actual numbers for August were higher in sales figures compared to the month of September. This speaks to the headwind the real estate market is facing due to the lack of affordability, which is driven by higher interest rates.
2. Active and New Listing has been Increasing
The number of active and new listings has been increasing faster compared to the number of sales. This leads to higher months of inventory: It will take longer for these properties to sell and eventually as more supply sits on the market, there will be downward pressure on prices moving forward.
3. Affordability Challenge
We have had 53,000 sales up till September 2023. In the greater Toronto area, 82 % of those of sales have been under $1.5 million which again speaks to the lack of affordability due to higher interest rates.
4. Lowest Sales since 2010
Overall, 2023 looks like it has the lowest sales since 2010. Last year we had 75,000 sales. So far in this year, we've had 53,000 and it looks like we will end up around 70-72,000.
