Many industry watchers attributed the slow start to the year for real estate sales to the chilly weather.Sammy Kogan/The Globe and Mail
An icy January in Toronto had a chilling effect on real estate sales, but a further slide in February suggests the vagaries of Mother Nature are not solely to blame.
That’s the view of National Bank of Canada senior economist Daren King, who notes that sales declined 4.9 per cent in February from January on a seasonally adjusted basis.
While many industry watchers attributed the slow start to the year to the harsh weather, sales would have rebounded in February if that were the only factor holding buyers back, he notes.
Last month’s decrease follows a 10.9-per-cent drop in January from December, and marks seven consecutive months of falling sales.
Chilly Toronto-area real estate market has pockets of warmth
The downturn erases all progress made since April, 2025, Mr. King says in a note to clients.
“The lack of momentum in the Toronto market is beginning to cause concern – especially since it occurs despite a more favourable interest rate environment and improved labour market conditions in the region since last summer.”
Sellers are also discouraged, Mr. King says, noting that seasonally adjusted new listings dipped by 11.5 per cent in February from January to bring the fifth decline in six months.
Mr. King believes the deterioration of trade relations with the United States continues to weigh on the market, along with a persistent lack of affordability.
More recently, the economist has added the conflict in the Middle East to his list of risks to a potential recovery in Canada’s housing market in the second half of this year.
Toronto area home sellers capitulate to a declining market
Patrick Rocca, broker with Bosley Real Estate, says the market remains erratic so far in March.
“There’s no consistency out there.”
Mr. Rocca drew two bully offers for a three-storey semi-detached house in the coveted east-end neighbourhood called The Pocket.
The well-renovated home at 19 Ravina Cres. was listed with an attention-grabbing asking price of $1.599-million and a date for reviewing offers.
A comparable but smaller home nearby had recently traded for that price, so Mr. Rocca figured the Ravina house would fetch more.
This semi-detached home on Ravina Cres. sold above asking for $1.8-million.BOSLEY REAL ESTATE LTD., BROKERAGE
A so-called bully submitted a bid without waiting for the offer date, followed by a second contender.
The house sold for $1.8-million.
Mr. Rocca says the deal came together as the war with Iran was spreading to surrounding countries. The sellers decided to accept a bully bid instead of waiting for the offer date.
“To gamble for another few grand wasn’t worth the risk – especially with all of the uncertainty.’
By contrast with that three-day turnaround, a condo which Mr. Rocca listed in September finally sold in February.
The eventual buyers had been wavering for several weeks, he says.
Mr. Rocca kept in close touch with their agent in an effort to coax a written offer that would set negotiations in motion.
“I was doing everything I could to get it on paper. I do everything but show up at the agent’s house,” he says with a laugh.
House hunter’s dilemma: Buy, or wait to see if prices fall some more
Mr. Rocca has come across agents in real estate chat groups who are struggling to close deals. One was lamenting that she has a roster of unrealistic sellers for all 10 of her listings.
Mr. Rocca advises less experienced agents against working with stubborn homeowners because every listing requires an investment of time and marketing costs.
“If you take on those listings, you’ve got to have deep pockets and thick skin.”
Scott Hanton, broker with Hanton Real Estate, describes today’s market as “hit and miss all over the city.”
“We’ve never seen it this unpredictable,” he says of the action.
Mr. Hanton recently listed a luxurious four-bedroom house at 132 Balmoral Ave. in the upscale Deer Park neighbourhood.
He explains the seller’s strategy is to “test the market” with the asking price of $5.395-million for the house with 3,615 square feet of living space.
Scott Hanton recently listed this four-bedroom house on Balmoral Ave. for $5.395-million.Hanton Real Estate Inc., Brokerage
Nearly every property with an asking price over $5-million in Forest Hill and the surrounding area has been listed and relisted many times, he says.
“We’re hoping something brand new will catch the right buyer,” Mr. Hanton says, pointing to the elevator that glides between all four floors, the heated driveway and front stairs, and the view of the downtown Toronto skyline from the rooftop terrace.
The homeowner paid $5,167,500 for the newly completed house in April, 2022.
Mr. Hanton acknowledges that he is bucking the trend in prices because values have eroded during that time.
“Our timing is terrible.”
In some neighbourhoods, detached houses in central Toronto are changing hands at prices 15 to 20 per cent or more below the 2022 peak.
Houses in the $4-million to $6-million range are sitting in some cases and snapped up in others, he adds.
“If we don’t sell it right now, it won’t hurt to come back next year,” he says. “Everyone knowledgeable knows it’s not the house – it’s the market.”
Three real estate markets that are bucking national trends
Mr. Rocca is holding off listing a few properties in Leaside and Davisville, where he does much of his business, until after the March break for private and public schools.
He is also hearing rumblings that the Iran war is unnerving for some homeowners and potential buyers in this country.
In the week following the breakout of hostilities, one builder he spoke with had a major construction project and a rebuild cancelled. One job was scrapped because a client with ties to Iran is fearful of the impact the conflict may have on their finances.
The other was dropped by a client who became jittery about the economic upheaval, despite having no ties to Iran.
Mr. Rocca points out that the broadening war has roiled financial markets in the past two weeks.
Home buyers who hold stocks, for example, may see a dent in their portfolio and decide to put plans to upsize on hold.
“I think there are going to be some reverberations around that.”
Mr. Rocca is also concerned for the health of the broader economy and upcoming mortgage renewals for debt-laden homeowners.
“It was going to be a tough year anyway,” he says. “It’s going to get worse.”