Toronto-area home sellers are facing an unusually slow and challenging summer, with buyers taking their time and negotiations often dragging on in a market that’s shifted heavily in their favour.
According to local real estate professionals, the city’s property market is experiencing a glut of inventory and historically low sales for what is typically the spring’s busiest month.
May saw inventory surge compared to last year, while sales stayed muted. Condo sellers, in particular, are feeling the pressure as an abundance of listings empowers buyers to drive harder bargains. In central Toronto, the average price for a condo apartment fell to $758,214 in May, a significant 8% drop from a year earlier.
“That is a significant number,” Christopher Bibby, broker with Re/Max Hallmark Bibby Group Realty, told The Globe and Mail.
Condo sales in the area declined 21% year-over-year, while active listings rose by 14%. As a result, some units sit so long between showings that owners call to confirm their listings are still active.
“This is the most active number of price reductions I’ve seen in my entire career,” said Bibby, who has worked through cycles including the 2008 financial crisis. Some condo owners who bought at the market’s peak in 2019 are now facing the prospect of selling below their original purchase price.
Pritesh Parekh, real estate agent with Century 21 Legacy Ltd., described the current environment as “so steeply tilted in favour of buyers” that it’s unlike anything he’s experienced before.
Despite the surge in supply, he noted, “prices have held up fairly well,” referencing Toronto Regional Real Estate Board data showing the average price of a detached house dropped 5.4% year-over-year in May to $1,425,264. Across all home types, sales in the Greater Toronto Area declined 13.3% compared to May 2024, even as active listings ballooned by 41.5%.
Daren King, economist at National Bank of Canada, noted that “market conditions in the GTA are at their softest since 2008-2009.” King pointed out that while overall sales rose 8.4% from April to May (seasonally adjusted), they remained 29% below their most recent peak in November.
Despite more choice and less competition, conditions buyers once wished for, many remain wary of economic and political turmoil, potential further interest rate drops, or job losses.
“Then they actually lost their job. It actually happened in the GTA,” Parekh said. “People start to think about their own security with their jobs.”
For buyers with secure employment, the current downturn may present an opportunity, especially for those planning to hold property long-term. Still, Parekh doesn’t anticipate a quick turnaround.
“It feels like this time, it will be a slow transition to a different market,” he added.
Negotiations are growing increasingly intense. Bibby recently handled offers for eight condo listings, but only two resulted in deals. Some buyers repeatedly lowered their offers, believing sellers are desperate.
“None of those eight people had to take what was in front of them,” Bibby said. “The buyers are looking for blood, but the sellers will decide what they’re willing to accept.”
He warned that aggressive tactics can backfire by alienating sellers.
“They could do it with a little more dignity. We don’t want to sour the negotiation,” Bibby said.
Some sellers still hope for 2021-level prices, believing their unit’s unique features warrant a premium.
“I think the numbers that a lot of people have in their minds – those numbers are long gone,” Bibby said, cautioning that a more competitively priced unit in the same building can quickly reset the market. “When the lower price results in a sale, that becomes the new benchmark.”
Looking ahead, Bibby expects new listings to slow in the condo market over the summer, but some sellers are already eyeing a better fall market. Positive developments, like a Bank of Canada rate cut or favorable trade news, could help stabilize prices and inventory. However, he doesn’t foresee a rapid rebound.
“Even if we recover, are we going to be better off in a year? I don’t think so.”
Bibby believes the current malaise is a necessary unwinding of the market’s rapid run-up in 2020 and 2021.
“Where we are today doesn’t surprise me. The ingredients have been there for a long time,” he said.
For now, Toronto home sellers face a summer of tough choices, and buyers are wasting no time pressing their advantage.
CMP
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