In 2022, Canada's housing market maintained its downward trend, with the volume of home sales decreasing by a third compared to the previous year and house prices falling by over 10%. According to a press release from the Canadian Real Estate Association, the average price of a home in the GTA in October 2021 was $1,159,763. One year later, the average price dropped by 5% to $1,098,502, showing a reduction of 5%.

According to recent data from the Toronto Region Real Estate Board, the average price for all property types in November 2022 was $1,079,39 compared to $1,162,564 in November 2021, a decrease of 7.2%. November homeownership market activity continued to be driven by the impact of rising interest rates on affordability.  Following the pattern that has developed since the beginning of interest rate hikes in the spring, sales were significantly lower compared to the same period last year.

In addition to being much lower than the previous year, the number of new listings was historically low. Since August, average selling prices have stayed between $1.08 and $1.09 million due to the fact that the number of available homes has remained low. Greater Toronto Area (GTA) REALTORS® reported 4,544 sales through TRREB's MLS® System in November 2022 – a decrease of 49 percent compared to November 2021, but a level comparable to October, especially when accounting for the repeating seasonal decline in the fall.

Both year-over-year and month-over-month, the number of new listings (8,880) decreased. The MLS® Home Price Index Composite Benchmark was down by 5.5 percent year-over-year in November 2022. The average selling price for all home types combined was down by 7.2 percent year-over-year. Annual price declines continued to be greater for more expensive market segments, including detached and semi-detached houses.

“Selling prices declined from the early year peak as market conditions became more balanced and homebuyers have sought to mitigate the impact of higher borrowing costs. With that being said, the marked-down price trend experienced in the spring has come to an end. Selling prices have flatlined alongside average monthly mortgage payments since the summer,” said TRREB Chief Market Analyst Jason Mercer.

Toronto Housing Market Forecast 2023

In the past month, home prices in Toronto have decreased by around 5.5%, with the decline being most pronounced for detached (11.3%) and semi-detached properties (13.9 percent). In February of last year, the average price of all property types in Toronto peaked at $1,334,062 and bottomed out in July at $1,073,242. The average price across all property types was $1,079,398 in November 2022, compared to $1,089,428 in October, decreasing by roughly $10,000.

Here is the summary of the Toronto housing market for November 2022.

• The average home sold price in the Toronto area decreased 7% year-over-year to $1,079,395 for November 2022.
• The continued slowdown in Toronto’s housing market has been contrasted with some support in prices, led by restricted supply on the market.
• The detached home average price decreased by 11% year-over-year to $1.39M.
• The semi-detached home average price decreased by 14% year-over-year to $1.04M.
• Freehold townhouse average price decreased by 9% year-over-year to $994k.
• The condo apartment average price remained the same year-over-year.

The Forecast

According to Re/Max Canada's housing market forecast for 2023, the average price of a home in the Greater Toronto Area is projected to decrease by about 12 percent over the following year. According to Re/Max Canada's housing market forecast for 2023, the average price of a home in the Greater Toronto Area is projected to decrease by about 12 percent over the following year.

Amid rising interest rates and a looming recession, RE/MAX Canada is anticipating a modest decline of 3.3 percent in average residential sales prices across the country in 2023. The estimates are based on surveys of RE/MAX brokers and agents from coast to coast. In sharp contrast to 2022, most regions analyzed in the report will experience more balanced conditions in 2023 – a trend that’s already starting to materialize as a result of current economic conditions.

Canadian Consumer Trends

RE/MAX CANADA surveyed Canadians for their sentiments on the 2022 housing market and their expectations for 2023.

• 54% of Canadians said they feel confident that their financial situation will remain stable in 2023.


• 38% aren't confident in their financial situation, especially non-homeowners and lower-income households.


• 45% are concerned that further interest rate hikes will impact their ability to buy or sell a home in 2023.


• 67% of Canadians don't plan to buy a home in early 2023, and 62% don't plan to sell in that period, due to current market conditions.


• 54% of Canadians believe a two-year ban on foreign buyers will increase the supply of affordable homes for local buyers.


• 15% of Canadians are considering moving to another province in 2023 for more affordable housing. Non-homeowners are twice as likely to relocate.

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Sources:

• https://trreb.ca/index.php/news/news-releases
• https://wowa.ca/toronto-housing-market
• https://blog.remax.ca/canadian-real-estate-outlook/