August closed the summer on a constructive footing. Activity improved year over year while choice expanded meaningfully across the Greater Toronto Area. Buyers had more room to compare, and sellers who priced to the market continued to transact. It wasn’t a month of headlines; it was a month of quiet progress.
TRREB reported 5,211 sales in August, a 2.3 percent increase from a year earlier. New listings rose more quickly, up 9.4 percent to 14,038, reinforcing what buyers experienced on the ground: a well-supplied market that allowed for measured decision-making. That additional selection brought useful clarity to pricing conversations.
The average selling price came in at $1,022,143, down 5.2 percent year over year. The MLS® Home Price Index Composite was also lower by 5.2 percent compared to last August. However, on a seasonally adjusted basis both the HPI and the average price were flat compared to July. In practical terms, values stabilized month-to-month even as listings increased, a positive signal for sellers who have been looking for a floor, and a sign to buyers that today’s negotiability is coming from choice, not from a slide.
Seasonality shaped the flow of transactions as well. On a seasonally adjusted basis, sales edged lower compared to July, while new listings increased. That pattern is consistent with a market that is absorbing inventory at a steady pace rather than racing ahead of it. The result has been healthier balance: buyers benefit from time and selection, and sellers benefit from buyers who can act with confidence when the property and the price are aligned.
TRREB’s commentary underscored this tone of cautious progress. The Board characterized the summer as a period of modest improvement in sales alongside clear evidence that buyers continue to benefit from a supply of listings.
Affordability remains the governor on the pace of recovery, particularly at the average price point, and TRREB noted that further relief in borrowing costs would likely bring more buyers off the sidelines. For now, the headline is that the market is functioning: transactions are happening consistently in a setting that rewards careful preparation and precise pricing.
The story by property type followed the same theme. Ground-level homes continued to find ready interest where they were presented and priced for the current environment, and condominium apartments offered compelling choice for buyers looking to prioritize location and budget. Sellers who led with strong presentation and realistic list strategies saw the best outcomes; buyers who were prepared and decisive were able to secure the right property.
Regionally, the experience was similarly consistent. Well-located homes attracted steady attention, but the market rewarded accuracy rather than aspiration. In many neighbourhoods, the spread between list and sale price narrowed when sellers pegged their asking price to the most recent, relevant comparables and allowed the market to confirm it. Where properties missed the mark, days on market elongated; where they met it, deals moved efficiently.
As we move from summer into early fall, the data suggests a market that is settling into balance. Sales are modestly higher than a year ago; supply is materially better; and prices are holding flat month-over-month on a seasonally adjusted basis even as buyers enjoy more choice.
August’s message is simple and constructive: more listings, steady month-to-month values, and transactions continuing at a measured, sustainable pace. In a market that has spent much of the last two years working through extremes, that balance is welcome.
Prepared by Chris Kapches, CEO, Chestnut Park Real Estate Limited, Brokerage
There were no surprises in the July residential resale data provided by the Toronto Regional Real Estate Board. A postpandemic pattern and market correction has emerged and barring any unexpected geo-political issues that might appear, the market pattern that has developed will continue through the remainder of 2025.
The market pattern can be characterized as follows: modest sales growth but substantially lower than the 10 year average; higher than average inventory levels; longer periods on market for properties before sale; and continual moderate decreases in average sale prices. The Regional market is a little more complex than this pattern alone, with regional differentiation and differentiation by housing type.
The Bank of Canada began its benchmark rate reductions in June of last year. In July, the Bank lowered the rate by another 0.25 percent, bringing it to 4.5 percent. Rate reductions continued throughout 2024. Rather than stimulate sales, these rate reductions had the opposite effect. Buyers, anticipating continued rate reductions, held off purchasing, anticipating and hoping for more favourable mortgage financing, which never materialized. Lower mortgage rates did not materialize because mortgage rates are driven by bond yields, not the Bank of Canada’s overnight lending rate. Bond yields remained high and continue to remain high. As a result, there has been little or no movement in mortgage interest rates. Five-year fixed term rates continue to hover around 4.5 percent. Then in January of this year the Trump administration took office and the uncertainty of Trump’s tariffs has completely unsettled real estate markets.
Given these underlying factors, the 6,100 sales achieved in July is a positive market sign. However, these sales were achieved at a result of declining average sale prices. Every housing type in the Toronto Region, some more than others, saw average sale price declines in July. Overall, the average sale price declined to $1,051,719, 5.5 percent lower than last July’s average sale price of $1,113,1161. The decline in the average sale price has improved affordability in the Region, affordability relief that has not been forth coming in the form of lower mortgage cost.
The market as a whole saw properties selling at 98 percent of their asking price and in 26 days.
The decline in average sale prices has not been homogeneous throughout the Region. Prices in the City of Toronto have not eroded to the same degree as prices in the 905 Region. In July, average sale prices for all property types in the City of Toronto declined by 4.8 percent, led by condominium apartments which declined by 8.6 percent. Prices in the 905 Region declined by 7.65 percent, also led by condominium apartments which declined by 10.3 percent year-over-year. No doubt this bifurcation is also a post-pandemic correction. During the Covid-19 market buyers sought the sanctuary of more space and more reasonably priced housing than was available in the City of Toronto. That phenomenon has reserved itself.
The decline in average sale prices is primarily driven by the large number of properties on the market available to buyers. Except for some isolated, desirable market areas, the heady days of competing offers for properties has come to an end. Buyers now have the luxury of time and choice. Time to negotiate offers that are financially acceptable, and choice to choose from the 30,215 properties listed for sale in July, not a record, but substantially more available properties than have been on the market over the last decade. It should be noted that of those 30,215 properties on the market in July, 33 percent, or 10,013 were condominium apartments, the bulk of them, 65 percent, located in the City of Toronto.
Given these market dynamics, it is not surprising that homes are taking longer to sell. The average days on market has been inching up since the beginning of the year. In July it took 30 days for all properties (on average) to sell, 6 days longer than last year. This number is not entirely accurate. More than 30 percent of all available properties have been listed more than once. Having failed to sell during the initial listing they are relisted, most often at a reduced asking price. The Board’s days on market data only recognizes the last listing for properties before sale.
Looking ahead, affordability continues to be an obstacle to homeownership for most buyers. The average sale price of $1,051,719 is not a good reflection of actual values. In the City of Toronto detached properties sold for $1,572,832. Semidetached properties sold for $1,242,388, and townhouse came in at $920,197. Condominium apartments sold on average for $684,257. Although lower overall, the ratio of sale prices for detached, semi-detached, townhouses and condominium apartments in the 905 Region was similar. Given household incomes in the Region, only condominium apartments can be regarded as “affordable”. Unfortunately, given the size of most condominium apartments that have been built over the last decade, they are not liveable by families.
The second half of 2025 will be a vast improvement over the second half of 2024. Market conditions that have defined the last few months will continue – improved sales, and moderate price reductions that will stabilize by year-end, with variations on this theme based on trading areas and housing types.
Prepared by Chris Kapches, CEO, Chestnut Park Real Estate Limited, Brokerage
In the current resale market it has become obvious that pricing most properties preparing for market is not aligned with market values, at least as received by Buyers. This is no doubt due to the lingering after-effect of the Covid-19 resale market when properties, for the most part, sold above their list prices. This is no longer the case.
In the greater Toronto area, all properties sold during the month of June were reported sold at 98 percent of their asking price and took 42 days to sell.
The sales-to-list ratio of 98 percent is not uniform. Contained in the universe of June sale prices are condominium apartments, detached, semi-detached and townhouse properties. In addition, different neighbourhoods and real estate districts throughout the greater Toronto area — Burlington in the West, Innisfil, Georgina and Brock to the North, and Clarington to the East — have been more attractive to buyers than others. Consequently, any definitive or universal analysis of list price vs. final selling price is not possible or realistic.
The results of this study are based on the following data: all sales in C09 in Toronto — basically Bloor Street to the south, Moore Avenue to the north, Bayview to the east and Yonge Street to the west — from January to June 2025. The range of sale prices was from a low of $1,130,000 to a high of $16,180,340.
This district encompasses Rosedale, one of Toronto’s most affluent neighbourhoods.
In total, 60 property sales were analyzed. Given the price point of many of the properties within this district, sales are not as rapid as in some other G.T.A. neighbourhoods, although as the data indicates, realistically priced properties will move quickly regardless of price point.
It should also be noted that on average, each of the 60 properties had 1 (0.9) price adjustments before being reported sold. Importantly, some of these 60 properties sold above their asking price (greater than 100 percent) and averaged a sale price of $3,485,513 in 7 days without a price adjustment.
The results of these sales strongly point to the fact that accurately priced or strategically underpriced properties will attract immediate interest, creating competitive environments that push the final sale price higher than the list price.
Below is a chart setting out the result of the 60 property C09 sales vs. initial listing price analysis by price point.
The data from C09 and the 60 sales in 2025 clearly demonstrate the critical impact of accurate initial list prices and optimum sale price outcomes. Misalignment between initial price expectations and buyer market perceptions significantly extends selling time and necessitates frequent price revisions, particularly pronounced in the luxury property segment.
Please use this data with clients when engaging with list price strategies. This data demonstrates that a realistic and market-driven marketing strategy will have fast and extremely beneficial sales results.
Analysis by Chris Kapches. Data by Christian Mijatovic
The Toronto and Region residential resale numbers for June are a mix of good, bad and strange news. Let’s begin with the good news.
In June, the Toronto Regional Real Estate Board reported 6,243 home sales. Although the number of reported sales was 2.4 percent fewer than the 6,397 reported sales last June, the comparison was the smallest negative year-over-year variance of 2025. For example, the negative variance was more than 23 percent in April and over 13 percent in May. Also, June represented the 5th consecutive month that saw an increase in sales compared to the month before.
The resale market has developed momentum through the first half of 2025. The resale market stalled at the beginning of the year when tariff and economic uncertainty initiated by the Trump administration caused buyers to freeze and to put buying on hold, particularly when they received no help from the Bank of Canada and mortgage interest rates have remained above 4 percent. It appears that as the year has progressed, buyers – at least some of them – have adjusted and have now entered the market.
On the negative side, two numbers can not be ignored – inventory and the average sale price for all properties reported sold.
During the month of June 19,839 “new” listings hit the market. More than 30 percent of all “new” listings are properties that have previously been on the market and did not sell. These new listings brought the total amount of active listings available to buyers by month-end to 31,603, a number approaching record levels. By comparison, during the month of June 2019, the year before the Covid-19 pandemic, the month of June ended with 19,655 active listings, slightly less than the total number of new listings that came to market in June of this year. These exceptionally high inventory levels – more than 33 percent of all available listings are condominium apartments – provide buyers with greater choice and more time to negotiate than they have had in years. These high inventory levels are having a direct impact on average sale prices.
In June the average sale price for all properties sold came in at $1,101,691, 5.4 percent less than the average sale price of $1,165,491 achieved last June. Condominium apartment sales contributed to the overall decline in average sale prices, but it was sales in the 905 Region that saw the largest decline in average sale prices. It is clear that average sale prices are drifting downward. Whether this is a long-term trend, or one driven by the high inventory levels and continuing high mortgage financing costs is yet to be determined.
On the strange side is the continuing and even wider bifurcation between the Toronto and the 905 Region resale markets. Whereas sales increased in every housing type (excluding condominium apartments) in the City of Toronto in June, they similarly declined in the 905 Region. Detached, semi-detached and townhouse sales in the City of Toronto increased by almost 10 percent in June. Similar type properties in the 905 Region decreased by over 8 percent. A dramatic inversion in the marketplace.
Similarly, but not nearly as dramatically, average sale prices between the City of Toronto and the 905 Region were also bifurcated. In the City of Toronto average sale prices decreased by 4 percent in June. In the 905 Region average sale prices decreased by 6.4 percent.
It would appear that the exodus to “sanctuary” housing in the 905 Region that began in 2020 during the pandemic is reversing. Buyers appear to have overcome their pandemic concerns and are moving back to the denser neighbourhoods of Toronto, particularly Toronto’s eastern districts where sales, especially of semi-detached properties, continue to sell with prices over asking, and in very short listing periods. In Toronto’s eastern districts all semi-detached properties sold at 108 percent of their asking price and in only 14 days. The market as a whole saw properties selling at 98 percent of their asking price and in 26 days.
Condominium apartment prices continued their decline in June, but both the decline in average sale prices and sales were less than in previous months. In June sales declined by 2.5 percent compared to last year, and the average sale price for the Region came in at $696,424, 4.5 percent less than last June. The average sale price for all condominium apartments sold in the City of Toronto came in a little higher at $731,232.
June’s numbers may be the beginning of a new resale market landscape. This landscape can be characterized as follows: moderately increasing sales numbers, persistently high inventory levels, and moderating average sale prices. Underlying this landscape is affordability, or lack thereof. Given prevailing household income levels and persistently high mortgage financing costs, for sales to continue to increase, pressure on sale prices will continue. The Bank of Canada meets at the end of July. A sharp drop in the overnight lending rate could trigger increased market activity. At this point the Bank of Canada is expected to make a modest 0.25 percent reduction to its lending rate.
Prepared by Chris Kapches, CEO, Chestnut Park Real Estate Limited, Brokerage
The best place to begin this Report is with the good news. May saw 6,244 homes trade hands, the fourth consecutive month of increased, and very welcome, sales.
The pace of sales is still weaker than 2024, which itself was not a strong residential resale year, particularly during its last six months. May’s reported sales were 13.3 percent fewer than May 2024, but more than 10% higher than reported sales in April. Last year 7,206 properties were reported sold. The good news is that each month, beginning in January, the negative variance is becoming smaller, and barring any unforeseen geo-political uncertainty, by the end of July the variance should swing from negative to positive.
The average sale price for May, for all properties sold, including condominium apartments came in at $1,120,879, 4 percent lower than the average sale price of $1,167,646 achieved last year. The average sale price for all property types declined in May, both in the city of Toronto and in the 905 Region, with condominium apartments declining by 7.3 percent in the city of Toronto, where the bulk of the supply of available condominium apartments is located. In the last two years the average sale price of condominium apartments has declined by more than 10 percent, and sales are more than 25 percent lower than May of 2023.
The disproportionate size of condominium apartment inventory, sales, and average sale prices vastly distorts any overall analysis of the Toronto and Region residential resale marketplace.
As we approach the second half of 2025 the market focus is on the swelling size of the Toronto and Region inventory of available properties. In May 21,819 “new” listing came to market. “New” requires some clarification. Many of these new listings, approximately 40 percent, are in fact re-listed properties, properties that have already been on the market, did not sell, and are now back on the market, most often with an asking price reduction. Having said that, 21,819 new listings coming to market in one month is a large number, verging on a record high.
At the end of May there were 30,964 active listings available to buyers, the third highest number of active listings on record. A deeper dive into the data indicates that 34 percent, or 10,523 of these listings are condominium apartments, the worst performing sector of the Toronto and Region resale market. Moreover, almost 7,000 condominium apartments for sale are located in the city of Toronto. The end result is that the swollen Toronto inventory numbers are primarily driven by condominium apartments. Similarly the overall average sale price for all properties sold is also (negatively) influenced by the sale price of condominium apartments.
In May the average sale price for all properties sold came in at $1,120,879, 4 percent less than the average sale price of $1,167,646 achieved last year. The average sale price for condominium apartments was $710,000 in the city of Toronto and only $633,000 in the 905 Region. Average sale prices for detached, semi-detached and townhouse properties, both in the city of Toronto and the 905 Region, were considerably higher.
The Toronto and Region resale market is anything but homogeneous. There are strong pockets, based in housing type and location, and similarly weak market areas, like the condominium sector. The 905 Region as compared to price points for detached, semi-detached, and townhouse homes is less robust than sales of the same property types in the city of Toronto. This fractured marketplace has been evolving since the beginning of 2025 and becoming more prevalent as we move into the second half of the year.
As we move towards the second half of 2025, three major factors will drive the residential resale market, not only in the Toronto Region, but throughout the country. Firstly, the Federal government’s $25 billion housing plan, which includes G.S.T. discounts for first-time buyers, should help stimulate the moribund preconstruction market.
Immigration, supply and affordability pressures. These factors are intricately connected and directly impact the housing market. Immigration numbers are expected to decline which will lessen demand. Supply will remain at historically high levels. Affordability is, to a great extent, dependent on the Bank of Canada and bond yields. A decline in the cost of mortgage financing would have a very positive effect, stimulating sales, which will ultimately bring down supply levels.
Lastly, economic signals, which will vary regionally, will also impact the market. The resale market is already experiencing a decline in average sale prices, modest in the case of ground level housing, and dramatic in the case of condominium apartments. The second half of 2025 may see further declines in average sale prices which will, to some extent, ameliorate consumer affordability pressures, which should result in substantially higher sale numbers. These signals will in turn further stimulate buyer activity.
It is impossible to predict how the resale market will unfold in the second half of 2025. (Generally, markets are impossible to predict). There is, however, optimism, albeit mild, that the second half of the year will produce a marked improvement over the first half, and strong signs that it will far outdistance the second half of 2024. Again, the world appears to be run by erratic leaders. Their decisions can, if they create uncertainty, upend even the most cautious forecasting.
Prepared by Chris Kapches, CEO, Chestnut Park Real Estate Limited, Brokerage
The foundation of a robust residential resale market is certainty, which in turn is usually associated with economic stability. Unfortunately, the Toronto and Region residential real estate market is in one of the most chaotic, turbulent, economic situations since the equity market meltdown in 2008. This uncertainty was reflected in the Bank of Canada’s decision to hold its overnight rate at 2.75 percent during its meeting in April.
A bank rate reduction would have been welcomed by consumers. As this report will indicate, average sale prices for most property types in the Region, particularly the City of Toronto, remain lofty. A rate cut would have helped with affordability. Mortgage interest rates continue to be elevated – 5 year fixed rates remain over 4 percent. The weak economic numbers, an early response to the tariffs proposed (and in some cases implemented) by the Trump administration, persuaded the Bank of Canada to hold its rate.
There is no doubt that the overall numbers for the April resale market are moribund. Yet within these gloomy numbers are some bright spots that speak to the strength of the Toronto and Region real estate market.
In the March Market Report, it was pointed out that the marketplace was trifurcated between the City of Toronto, the 905 Region, and the condominium apartment marketplace. That trifurcation continues into April.
Condominium apartment sales are the worst performing sector in the Toronto and Region marketplace. In April on a year-over-year basis sales declined by 29.9 percent in the City of Toronto and 31.5 percent in the 905 Region. Prices also declined by 7.3 percent and 6.1 percent, respectively.
The condominium apartment market accounts for 36 percent of all active listings, but interestingly only accounted for 25 percent of all sales. In addition, the average sale price of all condominium apartments reported sold was only $678,048, and $710,724 in the City of Toronto. Clearly factoring condominium apartment sales numbers severely distort the overall numbers, particularly average sale price.
This is nowhere more apparent than in a review of the market performance of detached and semi-detached properties, particularly in the City of Toronto.
All detached properties – on average – in the City of Toronto, sold in only 19 days, at 100 percent of their asking price, and at an average sale price of $1,700,710. The numbers in the 905 Region were not as robust. Detached properties sold in 20 days, at 99 percent of their asking price and at an average sale price of $1,324,280. This divergence has been at play since the beginning of the year.
Although semi-detached property sales in the 905 Region performed strongly compared to detached property sales, they could not keep pace with semi-detached property sales in the City of Toronto. In the City of Toronto all semi- detached properties sold in only 14 days, at 107 percent of their asking price, with the average sale price coming in at $1,266,322. In the 905 Region semi-detached properties sold in 16 days, at 104 percent of their asking price, and at an average sale price of $944,934, almost 35 percent less than semi-detached property sales in the City of Toronto.
The trifurcation continues.
Inventory levels are becoming quite elevated. In April alone almost 19,000 new listings hit the market – it should be noted that this number, which can not be dismissed, is deceptive. On average about 40 percent of all “new listings” are re- listed properties, properties that did not sell during their previous list periods. At the end of April there were 27,386 active listings available to buyers, a historically high number. This plethora of choice is causing average prices to slightly soften, and more dramatically in the case of condominium apartment sales.
So where are the bright spots in this marketplace? Firstly, monthly sales numbers have continued to increase since the beginning of the year, with April reporting the highest monthly numbers in 2025. Secondly, the pace of sales-to- list ratios, and average sales prices for detached and semi- detached properties, especially in the City of Toronto, make it clear that demand is strong and inchoate, ready to explode when economic certainty returns and, with the help of the Bank of Canada, affordability improves. The next Bank of Canada meeting is scheduled for June 4th, 2025.
Lastly, and this bright spot is not in April’s numbers but flows from them, is that early May numbers are the strongest the market has produced year-to-date. Following the first full week in May, the market is producing sales that are 20 percent higher than reported sales for the same period in April of this year. Barring further and unexpected geo-political disruptions the resale market, though still historically weak, will continue to improve, moving towards historical norms.
Prepared by Chris Kapches, CEO, Chestnut Park Real Estate Limited, Brokerage
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If you’ve been following the Toronto real estate market, you will likely be aware of the number of key interest rate hikes that the Bank of Canada has implemented since its first rate hike on March 2, 2022. If you haven’t been paying attention to the Toronto real estate market, interest rates or the economy in general, below is an timeline of how we went from a 0.25% overnight interest rate to a 5% interest rate as well as a statement from the Bank of Canada regarding its most recent decision to hold the overnight rate at 5% for the second time in a row. It’s hard for anyone to predict 100% what the future holds in regards to rates, but many in the lending and real estate industries are suspecting that we could begin to see a decrease in the overnight rate in the second half of 2024 or potentially sooner. With that being said, it is unlikely we will see an overnight rate as low as 0.25% any time in the near future. The days of essentially free money are long gone.
The Bank of Canada released the following statement below regarding their decision to hold the overnight rate at 5% and the economy in general:
“The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.
The global economy is slowing and growth is forecast to moderate further as past increases in policy rates and the recent surge in global bond yields weigh on demand. The Bank projects global GDP growth of 2.9% this year, 2.3% in 2024 and 2.6% in 2025. While this global growth outlook is little changed from the July Monetary Policy Report (MPR), the composition has shifted, with the US economy proving stronger and economic activity in China weaker than expected. Growth in the euro area has slowed further. Inflation has been easing in most economies, as supply bottlenecks resolve and weaker demand relieves price pressures. However, with underlying inflation persisting, central banks continue to be vigilant. Oil prices are higher than was assumed in July, and the war in Israel and Gaza is a new source of geopolitical uncertainty.
In Canada, there is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures. Consumption has been subdued, with softer demand for housing, durable goods and many services. Weaker demand and higher borrowing costs are weighing on business investment. The surge in Canada’s population is easing labour market pressures in some sectors while adding to housing demand and consumption. In the labour market, recent job gains have been below labour force growth and job vacancies have continued to ease. However, the labour market remains on the tight side and wage pressures persist. Overall, a range of indicators suggest that supply and demand in the economy are now approaching balance.
After averaging 1% over the past year, economic growth is expected to continue to be weak for the next year before increasing in late 2024 and through 2025. The near-term weakness in growth reflects both the broadening impact of past increases in interest rates and slower foreign demand. The subsequent pickup is driven by household spending as well as stronger exports and business investment in response to improving foreign demand. Spending by governments contributes materially to growth over the forecast horizon. Overall, the Bank expects the Canadian economy to grow by 1.2% this year, 0.9% in 2024 and 2.5% in 2025.
CPI inflation has been volatile in recent months—2.8% in June, 4.0% in August, and 3.8% in September. Higher interest rates are moderating inflation in many goods that people buy on credit, and this is spreading to services. Food inflation is easing from very high rates. However, in addition to elevated mortgage interest costs, inflation in rent and other housing costs remains high. Near-term inflation expectations and corporate pricing behaviour are normalizing only gradually, and wages are still growing around 4% to 5%. The Bank’s preferred measures of core inflation show little downward momentum.
In the Bank’s October projection, CPI inflation is expected to average about 3½% through the middle of next year before gradually easing to 2% in 2025. Inflation returns to target about the same time as in the July projection, but the near-term path is higher because of energy prices and ongoing persistence in core inflation.
With clearer signs that monetary policy is moderating spending and relieving price pressures, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. However, Governing Council is concerned that progress towards price stability is slow and inflationary risks have increased, and is prepared to raise the policy rate further if needed. Governing Council wants to see downward momentum in core inflation, and continues to be focused on the balance between demand and supply in the economy, inflation expectations, wage growth and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.
The next scheduled date for announcing the overnight rate target is December 6, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on January 24, 2024.”
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If you’ve taken part in a Toronto multiple offer situation (“bidding war”) in the past, you can very likely relate to the frustration that many buyers feel when blindly bidding on a home while competing with other offers.
The method of listing low and holding an offer date without disclosing the details of multiples offers during a “bidding war” has played a part in driving up home prices throughout Toronto and the GTA for well over a decade. You may or may not recall, but there was once a time when properties were listed at what was perceived to be their fair market value with it being common for offers to include several conditions which we have seen less of over the recent years. However, the list low and keep everything secret method isn’t the only factor that has driven up prices, a lack of supply and a long stretch of historically low interest rates has also contributed significantly.
When buyers are not aware of how much the other parties are offering in a bidding war, they can easily spend much more than they need to in order to secure the property. In many cases, buyers have unnecessarily thrown away many thousands of dollars above the market value of a property just to get their offer accepted. In addition to the financial risks that come along with blind bidding, buyers have often only visited the property once in person for a 30-60 minute window of time, and many find themselves waiving all conditions and representations and warranties in their offers in order to compete against other offers. This can amount to the buyer taking on a significant amount of risk if there ends up being any major structural, mechanical, appliance, legal or property boundary issues relating to the property being bought.
With all of this being said, in most cases, buyers unfortunately haven’t had a choice but to participate in a multiple offer situation over the past decade as the majority of listings have been listing below market value and holding an offer date. Additionally, as stated above, the historically low rates and lack of supply hav have pretty much ensured that there would be multiple offers on the offer date.
Due to the lack of transparency in the multiple offer process, TRESA has recently implemented a new rule which, as of April 1, 2023, will allow sellers to disclose all details within an offer such as the price, deposit, closing date, conditions, etc. to all other parties who are competing for the same property should the seller direct the listing agent to disclose such information. The only information that is not permitted to be shared is personal information about each bidder, such as their names, etc.
This new rule has been implemented in hopes of introducing more transparency to the bidding process. However, it’s important to remember that buyers are not entitled to this information unless the seller directs their agent to provide such information.
At a quick glance, this news may be exciting for buyers, but an important question to consider is: will this actually make a difference if there is no upside for a seller?
Historically, a seller has always wanted to achieve the highest sale price for their home and a buyer has always wanted to secure a property for the lowest price possible, and this isn’t likely to change. If keeping the offer prices private from the bidders provides the seller with the upper hand, why would the seller want to limit their return on investment by disclosing this information?
When living in a city such as Toronto where home prices have continued to skyrocket, mainly due to a lack of supply, combined with historically low interest rates in addition to substantial and constant demand and in a city where household incomes haven’t been able to keep up with the average sale price, it’s unlikely that sellers will choose to voluntarily take a hit to their return on investment. Toronto (and Canada more broadly) are constantly growing and home prices are becoming even more unaffordable for the average Toronto citizen, so it’s likely that sellers are counting on their return on investment to assist their children with securing their very own home one day in the future, paying for university tuition or paying off other debts, among many other valid financial reasons.
Not only is it unlikely that sellers will want to voluntarily disclose the details of an offer, but based on the way the new rules are currently written at the time of this blog post, it would be logistically challenging in a multiple offer situation if a seller changes their disclosure directions in the middle of an offer presentation.
Due to the potential complexity of disclosing such details of the offers such as price, deposits, conditions, reps and warranties, closing dates, irrevocable dates and times (deadline to accept) etc, and there being no real benefit to the seller for sharing such information about the offers, it’s unlikely for listing agents to recommend disclosing this information, resulting in potentially no change to the way offer presentations take place. Unless the entire offer presentation process is re-designed (which may be possible as it’s not set in stone), we will likely continue to see the same offer presentation structure.
Although it’s completely understandable for buyers to be frustrated with the lack of transparency during a multiple offer situation, the irony is that those same buyers who may be feeling frustrated today would likely have a different outlook on the situation should they purchase a property and later be required to disclose the offer prices to potential buyers when the time comes to sell as this could potentially negatively effect their return on investment.
With all of this being said, even if more transparency isn’t created from this new optional disclosure rule, as long as buyers continue to work with experienced Toronto real estate agents who actually know the Toronto real estate market extremely well, buyers will be making market based decisions when it comes to the amount that they are willing to offer on an offer date. When preparing for an offer date, your Toronto real estate agent should be able to provide you with statistical information and an approximate market value for the home that you are bidding on so that you aren’t going in to the offer presentation blindly and so that you can pre-set your limits in regards to how much you are willing to offer.
Are you thinking about buying or selling or do you have questions about the current market?
Contact me any time with your questions or to discuss your real estate questions. I’m always happy and here to help.
