The Toronto housing market has been a topic of much discussion and analysis over the past few years. After experiencing a period of rapid price growth and high demand, the market has seen significant changes in response to economic and policy factors. There are many questions about what the future holds for the Toronto housing market.
Will prices continue to decline? Will demand rebound or remain subdued? In this article, we will examine the latest trends and data from the Greater Toronto Area (GTA) housing market, as well as forecast what we can expect to see in the coming months.
Current Toronto Housing Market Trends for 2023
The Toronto real estate market is a dynamic landscape that continuously evolves, driven by various economic factors and trends. The Toronto Regional Real Estate Board (TRREB) releases regular market reports to provide insights into the state of the market, helping both buyers and sellers make informed decisions.
Average Home Prices
The average home sold price in the GTA witnessed a robust 3.4% year-over-year increase, reaching an impressive $1,125,928 for October 2023. Despite recent months positioning the market in favor of buyers, the housing market displayed resilience, sustaining the upward trajectory in average home prices.
Property Type Breakdown
- Detached Homes: The average price for detached homes experienced a notable 5.7% year-over-year increase, reaching $1.45 million.
- Semi-Detached Homes: This category saw a 2.2% year-over-year rise, with the average price reaching $1.10 million.
- Freehold Townhouses: Experiencing a steady climb, freehold townhouses saw a 1.8% year-over-year increase, reaching an average price of $1.04 million.
- Condo Apartments: Despite a 1.1% year-over-year decrease, condo apartments maintained a substantial average price of $709,000.
The GTA housing market has been navigating a buyer's market for the past two months, with the sales-to-new-listings ratio (SNLR) standing at 32% for October 2023. Despite the buyer-friendly environment, average home prices have continued to climb, showcasing the market's strength.
Benchmark Home Prices
The benchmark home price for October 2023 in the GTA reached $1,103,600, marking a 1% year-over-year increase. This figure, slightly down 2% from the previous month, offers insights into the trajectory of the Toronto housing market. Affordability challenges have led to an influx of luxury homes into the market, impacting average prices.
Luxury Home Influence
The presence of high-value luxury homes, particularly in areas like Bridle Path and Rosedale, has contributed to the buoyancy of the city's average home sold price. In Rosedale-Moore Park, the average home sold price surged by 31% year-over-year to $3,050,111, with a 23% increase in sales for October 2023.
As borrowing costs remain elevated, potential buyers are adopting a cautious approach, evaluating their financial situations and mortgage affordability. October 2023 witnessed 4,646 home sales in the GTA, reflecting a marginal 6% decline from the same period in the previous year. This stability in sales persists from the preceding month.
New listings in the GTA surged impressively by 39% year-over-year, reaching 14,397, while active listings saw a substantial 50% increase, totaling 19,540 in October 2023. This surge in available properties far outpaces the 6% decrease in GTA home sales over the past year.
Toronto Housing Market Regional Comparison
City of Toronto vs. Greater Toronto Area (GTA)
The City of Toronto mirrors the GTA's trajectory closely, with prices showing a 1% increase compared to the previous month and a notable 3% year-over-year growth. Toronto's average home sold price, standing at $1,127,635, aligns nearly identically with the GTA's average of $1,125,928. Despite a 5% monthly increase in home sales to 1,836 units, the year-over-year figure reflects a modest 3% decline.
The regional breakdown unveils diverse trends:
- York Region: Markham, Vaughan, and Richmond Hill experienced a 3% month-over-month decrease, bringing home prices to $1,293,179.
- Halton Region: Burlington, Oakville, and Milton witnessed a 4% month-over-month surge, reaching an average home price of $1,199,254.
- Durham Region: Oshawa saw a significant 6% month-over-month price increase, reaching $804,047.
- Brampton: A 4% monthly decrease places home prices at $999,458, relatively unchanged year-over-year.
- Mississauga: Experiencing an 8% monthly increase, the average home price in Mississauga soared to $1,106,263, reflecting a robust 12% year-over-year growth.
Property Type Analysis
Property types in the GTA exhibit stability on a monthly basis, with noteworthy year-over-year shifts:
- Detached Homes: Priced at $1,450,112 in October 2023, representing a 6% year-over-year increase and a 1% month-over-month rise.
- Semi-Detached Homes: A 2% year-over-year price increase brings the average to $1,102,721, up 1% from the previous month.
- Freehold Townhouses: Monthly stability with a slight 2% year-over-year increase, maintaining an average price of $1,042,124.
- Condos: The sole property type witnessing an annual decrease, falling 1% year-over-year to an average price of $708,780, with minimal monthly fluctuations.
With the housing market entrenched in a buyer's market, potential homebuyers in Toronto may anticipate favorable deals as the sales-to-new-listings ratio (SNLR) approaches a 14-year low. Expectations point towards a decline in Toronto home prices in the coming months, although the influence of luxury home sales might provide some support to the average price. Notably, the average sales price to listing price ratio stood at 99% this month, indicating that, on average, homes sold for less than their asking prices.
Toronto Housing Market Forecast 2023-2024
The Toronto Regional Real Estate Board (TRREB) released its October 2023 statistics, offering a nuanced perspective on the state of the Greater Toronto Area (GTA) housing market. The report sheds light on the challenges and dynamics influencing both buyers and sellers in the current real estate landscape.
Market Dynamics and Challenges
In October 2023, the GTA faced persistent challenges, notably the lack of affordability and prevailing uncertainty, hindering potential homebuyers. Despite these obstacles, the demand for housing, especially in the rental market, remained robust. TRREB President Paul Baron highlighted the impact of high borrowing costs and uncertainty about interest rates, keeping many homebuyers on the sidelines. The anticipation is that a downward trend in mortgage rates will swiftly stimulate home sales.
TRREB reported a total of 4,646 home sales in the GTA through its MLS® System for October 2023, marking a 5.8% decrease compared to the same month in 2022. On a seasonally-adjusted basis, sales also experienced a decline compared to the preceding month, reflecting the cautious stance of potential buyers.
New listings in October 2023 showed a noticeable increase compared to the 12-year low reported in October 2022. However, the rise was more modest when compared to the 10-year average for October. On a seasonally-adjusted basis, new listings saw a slight decrease month-over-month compared to September 2023, underscoring the nuanced nature of market dynamics.
Both the October 2023 MLS® Home Price Index Composite benchmark and the average selling price exhibited positive year-over-year growth, rising by 1.4% and 3.5% respectively. On a seasonally adjusted basis, the MLS® HPI Composite benchmark showed a marginal decline compared to September 2023, while the average selling price remained stable. Importantly, both metrics stayed above the cyclical lows observed at the beginning of 2023.
Despite challenges, competition among buyers remained robust enough to keep the average selling price above last year's level in October. Notably, home prices, while resilient, still fall below the record peak reached at the beginning of 2022. This has helped mitigate the impact of higher borrowing costs to a certain degree, as noted by TRREB Chief Market Analyst Jason Mercer.
Call for Relief
TRREB CEO John DiMichele expressed disappointment regarding the lack of relief for uninsured mortgage holders reaching the end of their current term. The qualification rule, requiring borrowers to qualify at rates approaching eight percent, remains a concern. DiMichele called for reconsideration of this rule, emphasizing the need for a more realistic approach to mortgage renewal qualifications.
The GTA's housing market, navigating challenges and exhibiting resilience, continues to evolve in response to economic factors and policy considerations. The intricate interplay of these elements shapes the outlook for Toronto's real estate landscape in the coming months.
Conclusion: A Balanced Outlook
The Toronto housing market forecast for the remainder of 2023 suggests a balanced outlook characterized by resilience, moderated price growth, and a continued focus on affordability. The market has shown its ability to adapt to changing economic conditions, which bodes well for both buyers and sellers. While the pace of growth might not be as rapid as before, this steadier trajectory could contribute to a more sustainable and stable market.
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.