It feels like it was just a few weeks ago that we were writing about Toronto real estate’s massive gains. Oh, it was just a few weeks ago — price drops are just happening really fast. Toronto Regional Real Estate Board (TRREB) data shows home prices fell in June. Prices fell even faster than they climbed, rolling back thousands in equity per week.
Greater Toronto Real Estate Prices Fell $56k Just Last Month
Home prices across the Greater Toronto Area are falling fast. The TRREB benchmark price for a typical home fell to $1,204,900 in June, down 4.5% ($56,900). Think paying rent sucks? The price drop works out to an average of $1,700 per day, if that visual helps. It’s not just a suburban issue either.
The City of Toronto is also seeing prices crater. The benchmark price in the City fell to $1,184,500 in May, down 3.8% ($46,400). For some reason it’s easier to believe prices increased that much per month on the way up, but not down.
Greater Toronto Real Estate Prices Are Down $130k In 3-Months
Greater Toronto real estate prices have made a sharp drop over the past few months. Since peaking in March 2022, the TRREB benchmark dropped 9.7% ($130,100) as of the end of June. Not a lot compared to price growth, but a large number nonetheless.
Methodology changes make it impossible to compare the price of homes in the City of Toronto. TRREB is getting back to us on the City’s benchmark change, which will get a deep dive next week.
Toronto Home Price Growth Is Disappearing Fast
As mentioned, Greater Toronto home prices are still up significantly, but falling fast. Annual growth for the TRREB benchmark price was still 17.9% ($182,800) in June. However, that’s down from 23.9% ($243,300) in May. A 6 point drop in growth is unbelievably large and fast deceleration. For context, long-term growth for real home prices is 3 points, and double that size went the other way.
The City of Toronto benchmark shows a similar deceleration for growth. Annual growth came in at a hefty 15.9% ($162,900) for June. This is down from the 20.0% ($205,500) in May, shaving off a slightly smaller drop.
It’s important to emphasize home prices are still up significantly, even with the drop. No need to panic and people aren’t going to need a bailout with prices rising just 15% from last year. However, the funny money made from easy credit is quickly disappearing as credit normalizes.