Toronto Real Estate Market Shifts towards Buyers as Sales Decline and Listings Surge
The Toronto real estate market is showing signs of favoring buyers as home sales decline and new listings increase. According to the Toronto Regional Real Estate Board (TRREB), the average home price in September rose by approximately three percent compared to the previous month, reaching $1,119,428. However, home sales experienced a sharp decline, down 12 percent from August and 7.1 percent from September 2022. The decline in sales was particularly notable in semi-detached houses and townhouses.
On the other hand, new listings surged in September, with a 32 percent increase from August and a 44.1 percent increase year over year. This surge in listings resulted in a sales to new listings ratio (SNLR) of 28.6 percent, firmly placing the market in buyers' territory. A balanced market is typically indicated by an SNLR between 40 percent and 60 percent.
TRREB's chief market analyst, Jason Mercer, suggested that this shift in the market could provide buyers with increased negotiating power in the short term. However, he also noted that the market outlook in the short and medium terms differs, with lagging demand expected to turn around by the middle of next year.
TRREB president Paul Baron echoed this sentiment, stating that borrowing costs are expected to remain elevated until mid-2024, after which they are anticipated to decrease. This could lead to a marked uptick in demand for ownership housing in the second half of next year.
Overall, the Toronto real estate market is experiencing a shift towards favoring buyers, providing potential opportunities for those looking to enter the market.
Hot Take: The Impact of Toronto's Real Estate Market Shift on New Businesses
The shift towards a buyer's market in Toronto's real estate sector could have significant implications for new businesses, particularly those in the property and construction industry. With home sales declining and new listings surging, there's an increased inventory of properties, which could potentially lower prices and increase the negotiating power of buyers.
For businesses looking to purchase property for their operations, this could mean more options at potentially lower prices. However, for those in the construction and development sector, this could mean increased competition and potentially lower profit margins.
Furthermore, the expected decrease in borrowing costs by mid-2024 could lead to an uptick in demand for ownership housing. This could be a boon for businesses in the real estate sector, as increased demand could drive up prices and profits.
However, the market outlook in the short and medium terms differs, and businesses must be prepared to navigate these changes. They must also consider the potential impact of increased borrowing costs on their operations. Overall, while the shift towards a buyer's market could present opportunities, it also brings challenges that businesses must be prepared to address.
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