Real Estate News

Buyer’s market dominates 85% of Greater Toronto Area regions

For the first time in a decade, home buyers in the Greater Toronto Area are finally getting a bit of a reprieve. Despite rising rates, mortgage rates are still at historic lows and now most of the GTA is in a buyer's market. Here's where the few remaining hot spots remain
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Housing markets across Canada are slowing. That’s not breaking news, but it is good news for home buyers in the Greater Toronto Area. For the first time in a decade, GTA home buyers are finally getting a bit of a reprieve. Sure, interest rates have started to rise, but historically speaking they are still very low. Now, combine this with rising house inventory and slower sales activity and you have a large percentage of the GTA that’s now in a buyer’s market. How large? Out of the seven GTA regions, only one — Dufferin — is in a balanced market. The rest are sitting comfortably in a buyer’s market.

Of course, real estate is regional. Even in a region that boasts opportunity for would-be home buyers, there are areas that are balanced — where supply is meeting supply — and even areas where sellers still have the upper hand. For instance, buyers can still expect to face bidding wars for houses in eight Metro Toronto communities, including large sections of East York and in the Annex area, High Park and further west in the Stonegate – Queensway neighbourhood.

Here’s the current market snapshot for single-family homes in the Greater Toronto Area:

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Why use active listings versus new listings?

We examined the GTA market for single family homes using the sales-to-active listings ratio and not sales-to-new-listings (SNLR) ratio. This means we compare demand — all homes sold within a given period of time — with current supply (all homes available for sale within a given period of time), without omitting stale listings — homes that weren’t new listings that month, but are still available because they haven’t sold, yet.

The sales-to-active listing ratio gives a more realistic and comprehensive view of supply and demand for a particular region over a specified period of time — commonly referred to as the market absorption rate. It’s also why the sales-to-active-listings ratio is also known as the Market Absorption Rate.

Expressed as a percentage, the sales-to-active ratio (or MAR – Market Absorption Rate) is calculated by taking the total number of sales at the end of a given time period (in this case, a calendar month) and dividing it by the total number of active listings available during the same time period. The higher the ratio, the more demand for the property and the more opportunity a seller will have to attract a higher price for their home for sale. A lower ratio indicates slower sales and the potential for falling house prices. A balanced market is when the supply of housing meets the demand from potential buyers. In a balanced market, sellers usually accept reasonable, close-to-list-price offers; homes typically stay on the market for close to the average number of days and prices remain fairly stable within the region.

Key takeaway: Single-family homes are on sale in the GTA!

For a few good bets, consider the following (ranked based on the market absorption ratio):

5 of the Top Areas in the GTA that Favour Buyers

  1. C13 (Parkwoods – Donalds, Banbury – Don Mills, Victoria Village)
  2. C15 (Bayview Woods – Steeles, Bayview Village, Henry Farm, Don Valley Village, Hillcrest Village, Pleasant View)
  3. Uxbridge
  4. C10 (Mount Pleasant East & West)
  5. East Gwillimbury

But what if you’re trying to sell your home in the GTA? What areas are still hot? What areas are still sitting in a seller’s market, where bidding wars should still be expected and pricing won’t adjust because demand is still high. Here are the neighbourhoods that currently favour sellers (based on market absorption rates):

5 of the Top Areas in the GTA that Favour Sellers (ranked in order, based on market absorption ratio)

  1. E01 (North & South Riverdale, Blake – Jones, Greenwood – Coxwell)
  2. E02 (The Beaches, Woodbine Corridor, East End – Danforth)
  3. W07 (Stonegate – Queensway)
  4. W02 (High Park North, Lambton Baby Point, Runnymede – Bloor West Village, Junction Area, Dovercourt – Wallace Emerson – Junction)
  5. W01 (High Park – Swansea, Roncesvalles, South Parkdale)

For comparison, check out last month’s GTA Market Report for houses.

Romana King
Romana King

Romana is an award-winning personal finance writer with an expertise in real estate. She is obsessed with the property marketplace and is the current Director of Content at Zolo.