Toronto's housing market appears to be moving toward a turning point, as tighter supply-demand conditions suggest the prolonged downturn may be losing momentum and paving the way for greater price stability, according to BMO Capital Markets in a Thursday note.
Absent a major external shock, recent trends suggest the market may have already passed the lows of this extended downturn, said the bank after the Toronto Regional Real Estate Board's (TRREB) July data was released earlier Thursday.
"We continue to see signs that the lows for this (very long) cycle are in place," wrote BMO economists in the note.
July data from TRREB showed sales down just 0.9% on the year while new listings fell 17.8%, pointing to a more balanced market, added the bank. Although the MLS HPI benchmark price remained 4.6% below last year, improving stability suggests prices may be nearing a floor.
The recovery remains uneven, with condos still under pressure as prices are down more than 7% year over year and inventory stays elevated, according to BMO. However, broader market conditions are improving as excess supply is absorbed and buyer competition rises.