Homebuyers’ choices have undoubtedly improved, but affordability has not improved as much. For markets to be fully on the buyers’ side, they need plenty of choice and affordability. Thousands more homes are available to purchase, but most remain out of reach of mid-income earners.
There was a 32 per cent increase in listings in September, according to the Toronto Regional Real Estate Board (TRREB), dropping the sales-to-new-listings ratio (SNLR) to 28.6 per cent. The industry rule of thumb says an SNLR of less than 40 per cent favours buyers and more than 60 per cent to favour sellers. Going just by that rule, it looks like a buyers’ market. The same report also said the average Toronto home price in September increased by three per cent from August. The average has increased by almost eight per cent since January. If housing was unaffordable earlier, it is still unaffordable.
However, the index increased by 60 per cent by the third quarter of 2022, suggesting worsening affordability. Affordability continued to worsen even when average prices declined in 2022. Higher borrowing costs wiped out the gains from falling prices.