Greater Toronto real estate prices are back, and it appears it’s being driven entirely by exuberance. TRREB data shows that home sales fell in January, while inventory surged. The demand balance showed some of the weakest sales on record, traditionally applying downward pressure on prices. However, the optimism over mortgage rules changing gave a handful of buyers the confidence to pay more as inventory rose a whopping 70%. Seriously.
Toronto Real Estate Kicks Off 2025 With Higher Prices
The benchmark price of a typical home across Greater Toronto.
Source: CREA; TRREB; Better Dwelling.
Greater Toronto real estate prices advanced last month, and show positive annual growth. The benchmark price climbed 0.7% (+$8,200) to $1,070,100 in January, with prices now 0.4% higher than last year. The monthly move was greater than the annual growth, highlighting a sharp change in sentiment.
Toronto Real Estate Prices Return To Positive Annual Growth
The annual rate of change for a composite benchmark home across Greater Toronto.
Source: CREA; TRREB; Better Dwelling.
Toronto Home Sales Fall, Inventory Surges 70% Higher
Despite the uptick in prices, supply and demand relieved pressure. Home sales fell 7.9% to 3,847 units in January, as buyers left the market. At the same time, new listings climbed by 48.6% to 12,393 homes. The sales to new listings ratio (SNLR) plummeted to 31% last month, one of the lowest levels on record. A SNLR at this level is considered an oversupplied market, where prices are expected to fall. Not the case last month, but it will be hard to sustain the trend if the market continues in this direction.
Weak demand and a flood of sellers helped push the total remaining inventory to lofty levels. There were 17,157 active listings in January, an increase of 70.2% from last year. It was one of the best-supplied markets ever for the month.
January isn’t typically a big month for real estate markets, but this one was more interesting than usual. Falling sales wouldn’t be surprising, especially given the turbulence over trade and potential tariffs. However, falling sales and rising prices alongside a massive surge in inventory is not a typical response. It likely indicates that expectations of the mortgage tinkering the Bank of Canada (BoC) warned against are driving the emotions of a handful of buyers who believe the market is set to take off. However, the wall of sellers probably feel like they’re in a completely different market.