How to Read Toronto Real Estate Statistics Without Being Misled

Monthly market reports get summarised into a headline about average price, which is the least useful number in the release. Here's how to read the rest.

Average price is a mix, not a measure

Average price rises when expensive homes make up a bigger share of sales, even if every individual house is worth less than last month. A month with heavy detached activity in Leaside will lift the average across the entire region. It tells you what sold, not what things are worth.

Benchmark and median are better

The benchmark price models a typical home with consistent characteristics over time, which strips out most of the mix effect. Median price — the middle sale — is less sensitive to a few luxury trades. Track those two together over several months rather than reacting to one month of either.

The leading indicators

• Months of inventory: active listings divided by monthly sales. Under two months is a seller's market; over four favours buyers.
• Sales-to-new-listings ratio: above roughly 60% indicates upward price pressure, below 40% downward.
• Sale-to-list price ratio: consistently above 100% means competition; below 98% means negotiation.
• Average days on market, and how it's trending, not its absolute level.

Segment before you conclude

The GTA is not one market. In the same month, entry-level detached homes in the 905 can be in bidding wars while downtown one-bedroom condos sit for 60 days. Region-wide stats average those two realities into a number that describes neither. Always drill down to your property type, price band and municipality before drawing conclusions about your own home.

Year-over-year versus month-over-month

Month-over-month movements are heavily seasonal — a March that beats February means nothing on its own. Year-over-year comparisons remove seasonality but can flatter or punish depending on what was happening a year ago. Look at both, and be suspicious of any story built on only one.