The Toronto real estate market continues to challenge prospective buyers as the affordability crisis in Toronto intensifies. With the latest market stats for September 2024 showing a rise in inventory and a cooling in sales, the city’s housing market is clearly in a buyer’s market. However, despite favourable conditions for buyers, the financial barriers to entry remain significant.
A Deep Dive Into the September 2024 Market Update
In the September 2024 market update, the Toronto Real Estate Board (TREB) reported that the housing market saw 18,000 new listings, a 35% increase in available inventory compared to last year. While the average home price in Toronto saw a slight decline year-over-year, the gap between home prices and buyer affordability continues to grow.
- Average sales prices down: Detached homes in Toronto dropped by 2.4%, and condos by 3.5% compared to September 2023.
- Buyers’ Market: With the months of inventory (MOI) hovering at 3.8, Toronto is still firmly in a buyer’s market, meaning there is a lot of inventory and homes are taking longer to sell.
Is It Really a Supply Crisis or an Affordability Crisis?
Many headlines focus on the supply crisis in Toronto, but the reality is more complex. The real issue is affordability. Despite an increase in available homes, many are priced out of reach for average buyers. A combination of rising interest rates, stringent mortgage rules, and increasing household debt means that fewer buyers can take advantage of the current market conditions.
According to Josh from Under the Radar Real Estate, “We can scream supply crisis all day long, but until we start building the right type of supply, we’re not in a supply crisis—we’re in an affordability crisis.” The homes available on the market today are often too expensive for most buyers, particularly young families and first-time homebuyers.
Key Market Stats You Need to Know
- Sales to New Listings Ratio (SNLR): This important stat measures how much new inventory is being sold. In Toronto, the SNLR for September came in at 37%, indicating that less than half of the new listings are being sold.
- Average Days on Market (DOM): Properties in Toronto are staying on the market for an average of 43 days, a 43% increase compared to last year. This increase reflects the buyers’ market, giving buyers more time to consider their options.
Neighborhood Breakdown: Where Are the Opportunities?
While the overall city shows a cooling market, certain neighborhoods in Toronto still present opportunities for buyers. In W03 (Eglinton West), W04 (Weston), and C03 (St. Clair West), average home prices are significantly lower than the city average:
- W03: The average home price is $985,000, offering a more affordable option compared to Toronto’s overall average of $1,051,000.
- W04: Prices here average around $903,000, making it a great option for those looking at Weston and Eglinton West.
- C03: Though pricier at $1.6 million, this neighbourhood still offers savings compared to neighbouring areas like Forest Hill.
For a detailed look at one these neighbourhoods, check out our video tour of Fairbank.
Final Thoughts: What Does the Future Hold?
The current market conditions in Toronto present a rare window of opportunity for buyers, particularly those who can navigate the complexities of the affordability crisis. While home prices have softened and inventory has risen, the high cost of borrowing and stagnant wages are keeping many buyers out of the market.
If you’re ready to explore the market, especially in under-the-radar neighbourhoods where there may still be good deals, don’t hesitate to reach out to us at Under the Radar Real Estate. The market may be challenging, but with the right guidance, you can still find value in Toronto real estate.
