Toronto's mighty real estate market has fallen quite devastatingly from its heydey over the last year or so, but amid a months-long sales slump and the ever-growing unsold inventory, many are rightfully wondering why home prices haven't dropped accordingly.

New stats from various corners of the industry show that the number of people purchasing new homes and thus, the number of developers building them have plummeted, while the number of properties on the market — especially condos — hits a record high.

And another recently published report has experts shedding light on at least one thing that is continuing to somehow drive prices in the city up, if it isn't demand.

Then bring the prices down then. Doesn’t economics 101 tell us that if demand is low and supply is high that prices must come down.

Since the market isn’t working, this is why we need government intervention through a price ceiling.

— Freakazoid! (@FreakazoidReal) September 5, 2024

RE/MAX's analysis of the detached housing landscape in Toronto and Vancouver, released on Tuesday, has much to say about the state of the market in Canada's two most expensive cities, including the fact that standalone single-family homes are increasingly becoming a "unicorn" in both places.

Though hardly anyone can afford them, the dream of a house with a yard is still persistent, and supply is only becoming more scarce due to the trend of high-density complexes over anything else.

So let the greedy Twats sit on them and not make any money💯🤣 in no way is it worth living there anyway 🤣🚫

— Will I IS (@BigPappiPataky) July 12, 2024

With a whopping 30 per cent of the GTA's present housing stock built in 1960 or earlier, this means a lot of renovations among those who can afford it, with "billions spent in infill and renovation raising the overall value of residential housing stock and continuing to support higher pricing on single-family homes despite downward market pressure," the firm writes.

Spending on revamping homes actually continued to increase nationally despite the pandemic and subsequent flailing economy, running eight per cent higher from 2019 to 2023 than in the previous five years. This was led by T.O. and Van, where construction activity for new single-family dwellings dropped by 24 per cent over the same period (construction for condos in both cities, conversely, soared by 60 per cent).

As RE/MAX's experts write, "revitalization remains one of the most underestimated factors behind escalating housing values," and will continue to drive prices up across the single-family home sector, but entire neighbourhoods as they become more gentrified and "redefined" by upgraded homes.

"Existing homeowners who can't find what they want in the market will buy an older home in an area of their choice and renovate or build their vision. We expect this trend will strengthen in the years to come and serve to drive price growth in single-detached housing even further," the report continues.

"There are a variety of variables at play, but renovation and revitalization is having significant implications for housing supply and affordability."

Areas like Parkdale, Trinity-Bellwoods, College St. West, East York, Leslieville and St. Clair West, in particular, are identified as prime targets for where property values could skyrocket most for this reason in the coming years.

RE/MAX noted that the average price of a detached home anywhere in the GTA has already surged by almost 35 per cent between December 2019 and December 2023 to $1,418,323.