The Review · Vol 11/24 · October 2024
Can’t sell, can’t buy: the upsizing struggle.
Written by Pawel Parafianowicz, Founder | Broker, Coral Realty Group ·
October got off to a sluggish start, following the noticeably quiet activity levels in September and an exceptionally slow summer. Many investors, discouraged by the stagnant market, opted to remove their units from sale and list them for lease instead.
However, as inflation reached the Bank of Canada’s 2% target in September and discussions around a potential 50bps rate cut gained traction, the market began to regain momentum.
First-time buyers started re-entering the condo market, while the freehold segment, particularly for homes under $1.7 million, continued to see steady growth.
A major challenge in today’s market is the growing dilemma for condo owners trying to upsize to detached homes. Check out our thoughts below for a deeper dive into this issue.
Buyer's or seller's market?
3.9 months of inventory: a buyer's market.
- Seller's under 2
- Balanced 2–3.5
- Buyer's 3.5–5
- Extreme buyer's 5+
Every October, months of inventory
November highlights
- 01Sales surge October sales jumped nearly 39%, marking one of the busiest months of 2024. Buyer confidence picked up toward the end of the month, fueled by lower borrowing costs and competitive pricing.
- 02Freehold vs. condo gap Detached homes led the market with strong price growth, while condos lagged, widening the gap between freehold and condo prices. Buyers waiting to upsize from condos may find themselves paying more as freehold prices continue to climb faster.
- 03Condo sales plummet New condo sales plunged 91% year-over-year as higher interest rates and affordability challenges kept buyers out of the market. Developers are pausing launches, and more units are being shifted to rentals instead of sales.
- 04Construction challenges Single-family home construction in Ontario dropped to its lowest level in 70 years, with rising costs, policy restrictions, and a focus on density making it harder to meet demand for ground-oriented homes.
- 05Record completions push rents down Toronto's condo market saw a surge in completions, with 2025 expected to set a new record. This influx has already led to a 3.8% drop in rents year-over-year. Adding to this, potential changes to immigration policies and the expiration of temporary worker visas could reduce Toronto's population, putting further pressure on rental demand.
Average price
The average home price climbed for the third month in a row, increasing from $1,113,671 in September to $1,165,660—a notable 4.7% jump. This upward trend was seen across all property types, including a modest 1.9% gain for condos. However, the star performer was detached homes, which surged by 5.5%. On a year-over-year basis, the average price has grown by 3.4%, with most property types in positive territory. Condos remain the exception, still down 2.3% compared to last year.
We’ll explore this in more detail in "Our Thoughts," but it’s worth emphasizing that the price gap between freehold homes and condos continues to widen. For those considering upsizing, holding out for a better price on their condo might be costing them more in the long run, as the price of their desired freehold property continues to rise.
Average price
$1,165,660 ▲ +3.4% vs a year earlier ($1,127,635)
- 2024
- 2023
- 2022
Average price by type
HPI
The Home Price Index provides an apples to apples comparison of home prices in the city and reflects a more accurate change in prices. According to this metric Toronto home prices are down -3.8% (YoY), detached -2.55% (YoY), semi-detached -1.6% (YoY) and condos down -8.4% (YoY).
MLS® Home Price Index
Sales
Sales surged by 38.8% from September to October, reaching a total of 2,509 transactions—the third busiest month of the year and the most active October in three years. Anecdotally, it felt like October started off quite slow, but activity picked up toward the end of the month, coinciding with the Bank of Canada's 50 basis point rate cut. Importantly, the sales-to-new-listings ratio increased as new listings declined month over month.
Sales by type
New listings
New listings decreased by 15.8% month over month, dropping from an unusually high 7,074 in September to 5,959 in October. To put this in perspective, September's 7,074 new listings were the second-highest for that month in the past decade. Even so, October's 5,959 new listings remain above the five-year average. Given the slow sales we experienced in September, many units carried over into October. However, with sales increasing by 38.8%, we still saw a decrease in overall inventory.
New listings by type
Active listings
Active listings declined from 10,022 in September to 9,756 in October, representing an overall decrease of 2.65%. Notably, active condo inventory saw a significant drop of 8.7%, decreasing from 6,119 units in September to 5,584 in October. While condo sales increased by 34.5%, the reduction in inventory can also be attributed to many sellers choosing to rent out their units after several months of unsuccessful selling attempts. Moreover, the high new listings figures this year have been partially distorted by numerous re-listings of condos that didn't sell the first time around.
Homes for sale by type
The bigger picture
Homes sold every October, 1996 to 2024
Average condo apartment price, by year
Condo prices are back near 2023 levels.
Our thoughts
Upsizing is becoming increasingly challenging, and waiting could make the move even harder. Condo prices have declined this year, far from the peak values many are mentally anchored to.
Many unsold units are being shifted to the rental market, creating an oversupply that is unlikely to change soon. With record condo completions expected in 2025, this oversupply will likely continue to weigh down condo prices. For condo owners hoping to sell, holding out for higher prices might be unrealistic and could result in missing the opportunity to upsize at today’s freehold prices.
Looking ahead, the challenges for the condo market are mounting. Toronto could see reduced rental demand as temporary work visas expire and net migration slows, potentially leading to stagnant or declining rental prices in 2025. These factors may further dampen investor interest, putting even more pressure on condo pricing. On the other hand, freehold prices are poised to grow, driven by rate cuts that could increase buyer activity in this segment.
For those considering upsizing, the financial gap between condos and freeholds will only widen. Selling now—even at a lower price than hoped—could mean securing a freehold property at today’s value before further price increases make it unattainable. The key is to price strategically and market effectively to ensure your condo stands out in this competitive environment. Acting sooner rather than later could save you both time and money while allowing you to make the move before the window narrows further.
Buyers -> Now is the time to buy—prices have stabilized, and with rate cuts likely coming, a variable mortgage gives you the flexibility to lock in lower rates when they drop. Don’t wait and miss out on this sweet spot in the market.
Sellers -> For sellers, a custom approach is key in this market. We've had success using off-market strategies to test the waters before fully listing, which helped us sell a home in Etobicoke in less than a week for over asking, even in a tough market. This tailored method lets us gauge interest, generate buzz, and fine-tune our strategy for when it officially hits the market—maximizing your chances of a successful sale.
Investors -> With all the new development rule changes, Toronto is easier than ever for newer investors to dive in. Whether it’s adding secondary suites, laneway or garden suites, building additional levels, or redeveloping properties using the MLI Select program, the opportunities are endless. When structured correctly, your investment can offer several ways to add long-term value, while also giving you multiple exit strategies. We’re here to guide you through it all. First step? Let’s grab a coffee and discuss your goals to build a custom strategy.
Source: TRREB. Figures as published in October 2024's data, sent November 26, 2024. Market commentary is general information, not advice for your situation.