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The May 2022 real estate statistics were released today for the Greater Toronto Area and they tell the story of a market in flux. In short: after reaching a peak in February 2022, the market continued to cool in May.

But there’s so much more going on than the media headlines would lead you to believe; we decided to take a deep dive into the statistics and what they really mean. So pour yourself a cup of coffee (or wine) and join us as we analyze what happened in the Toronto real estate market in May 2022.


For most of the last 18 months, the GTA market has been on fire. Unprecedented Buyer demand led to fierce bidding wars that in turn, resulted in a 27% increase in the price of an average home in Toronto, between February 2021 and February 2022.  There just weren’t enough homes for sale to meet the demand. 

But people wanted to buy more than houses….the appetite for ALL consumer goods increased too. After lockdowns and living with COVID, people were ready to live again. Then war broke out in Ukraine and much of China went into lockdown, and it all resulted in the perfect storm where supply couldn’t meet demand…and so prices for everything – from food to gas to real estate – went up. In April 2022, the inflation rate was 6.8%, higher than it’s been in 30 years.  

To counter rising inflation and in hopes of quelling consumer demand, the Canadian government took swift action and raised interest rates by 0.5% in May and another 0.5% in June (with a few more hikes expected in the coming months)

[Related | Explainer: Rising Interest Rates and Inflation and What it Means for Toronto Real Estate]

Analysis: May 2022 Real Estate Statistics

What’s Happening to Home Prices in Toronto?

While we usually look to year-over-year statistics to inform us about the health of the real estate market, those numbers can be deceiving in a shifting market. For example: In May, prices were technically up 9.4% year-over-year – which would be great news if we didn’t go deeper and look at what’s been happening during the last 3 months. So let’s start there. 

In February 2022, the average price of a home (condo or house) in the GTA was $1,334,544, up almost 28% from February 2021. But May 2022 saw the average price decline to $1,212,806, a 9% drop in just 3 months. For the average homeowner, that translated to a decline of $121,738. 

Before you start to panic, remember: Because the Toronto market accelerated so fast in the past 6 months, that 9% decline only takes us back to October 2021 prices. 

What’s Happening to Sales Volume and the Number of Listings?

Because the real estate market is seasonal, sales volume normally fluctuates according to a fairly predictable pattern: it’s highest in the spring and fall, and lowest in the depths of summer and winter. Besides seasonality, I always think of Sales Volume as a gauge of how buyers and sellers are feeling. 

In May 2022, the volume of sales in the GTA was down 38.8% vs May 2021. That’s a significant drop – but it doesn’t tell the whole story. Shifting markets are often accompanied by pauses, where Buyers and Sellers sit on the sidelines and try to figure out what’s happening before deciding to buy or sell. A significant drop in sales volume doesn’t necessarily translate to a significant drop in consumer appetite for real estate unless that drop is prolonged. 

Interestingly, the number of new listings in May 2022 was almost identical to May 2021…so despite being in the third month of a market shift, GTA Sellers didn’t panic and rush to list their homes for sale. 

The number of active listings (in other words, the number of homes listed for sale on the MLS) increased from 12,253 in May 2021 to 15,433 in May 2022, a 26% increase. That’s not unusual during a shifting market, where Buyers and Sellers are essentially in a staring contest with each other to see who will blink first. Will Buyers take advantage of current interest rates before they go higher and buy sooner vs later? Or will Sellers lower their prices further or take their homes off the market? 

Are We In a Buyer’s Market Now? 

In assessing the state of the real estate market, we often look to ‘Months of Inventory’ – how long it would theoretically take to sell all the homes currently listed for sale at the current rate of sales.

Explainer: When ‘months of inventory is below 4 months, most consider that to be a sign of a Seller’s Market (where the Sellers are in control); 4-6 months of inventory indicates a Balanced Market; and if there are more than 6 months of inventory, it’s considered a Buyer’s Market, where the Buyers are in control. Months of inventory is a moving average, calculated as the # of Sales divided by the Number of New Listings. 

In May 2022, we had 1.2 months of inventory in the City of Toronto – exactly the same as in 2021. So despite the pause in activity and the decline in prices over the last 3 months, we are still technically in a Seller’s market….but of course, when we’re in a shifting or paused market, we have to be cautious about drawing conclusions. It’s probably safe to assume that we are headed toward a Balanced Market soon. 

How Long Did it Take to Sell a Home in May 2022?

In May, the average home sold in 18 days, up from 15 days in 2021. But of course, we can’t forget that a lot of homes listed for sale are lingering on the market – they’ve already been for sale longer than 18 days but because they haven’t yet sold, they aren’t counted in the statistics. It’s safe to expect that the average number of days it will take to sell a home will continue to increase over the next few months. 

Pro Tip: If you’re listing your home for sale right now, don’t count on selling it in 18 days. 

But Those Statistics Only Tell Part of the Story…

The GTA is made up of multiple cities and communities and they aren’t being affected by the market shift in the same way. Neither are different types of dwellings – in other words, the market for houses is behaving differently than the market for condos (and not probably in the way you expect). 

Toronto vs. The ‘Burbs

During the pandemic housing boom, suburbs and rural communities experienced far greater price growth than the city of Toronto. It made sense at the time: people were working from home, everybody wanted bigger homes and more outdoor space and everything was closed in Toronto anyhow, so why not move to the ‘burbs or the country? 

In the last two years, the relative affordability of a home in the 416 (Toronto) vs. the 905 (the suburbs) changed significantly. Before the pandemic, the cost of the average detached house in the 905 was 68% of the cost of a detached house in Toronto….but by February 2022, it had risen to 83%.  

The change in relative affordability between Toronto and the ‘burbs during the pandemic means that prices in the 905 are subject to more volatility than in the city. The proof: in May 2022, the cost of a detached home in the 905 decreased to 75% of the cost of a detached home in Toronto as the suburbs experienced greater price decreases in the last 3 months than the City of Toronto. 

Condos vs Houses

Houses were in greater demand than condos during the pandemic, so it stands to reason that they are at greater risk during a market shift. Here’s what happened to prices from February 2022 to May 2022, by type of property:

All Toronto-7.7%-4.9%-12.5%-4.9%-3.5%
Toronto West-2.8%-5.4%-5.2%-4.5%-1.8%
Toronto Central-1.2%-1.7%-8.3%-5.6%-2.8%
Toronto East-12.3%-6.0%-13.5%-11.0%-4.9%

Phew. That was a lot of numbers. If you’re still reading…..thank you! Have questions about the May 2022 market statistics? Don’t be afraid to reach out!


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