As we moved from 2022 into 2023, the Greater Toronto Area (GTA) housing market unfolded
as expected. The number of January sales and the overall average selling price were similar to December 2022. The average selling price in January was $1,038,668 — down 16% compared to January 2022 but not significantly changed from the $1,051,216 average seen in December.
GTA REALTORS® reported 3,100 sales through TRREB’s MLS® System in January 2023 – in line with the December 2022 result of 3,110, but down 44.6 per cent from January 2022. New listings, however, remained steady. January saw 7,668 new listings in the region — a small 3.7% decrease compared to the 7,983 listed in January 2022. The decrease, TRREB data reveals, was fairly even between the City of Toronto and the rest of the GTA.
On a year-over-year basis, both sales and prices were down markedly, continuing to highlight the impact of higher borrowing costs on affordability over the last year. Home sales and selling prices appear to have found some support in recent months. This coupled with the Bank of Canada announcement that interest rate hikes are likely on hold for the foreseeable future will prompt some buyers to move off the sidelines in the coming months.
In the last couple of weeks, the Toronto housing market was showing surprising signs of life and brought a sudden flurry of sales. Bidding wars and bully offers were making a comeback, renewed interest in open houses, an uptick of showings being booked and listings with offer dates.
With some confidence returning to the market, pent-up demand from buyers who sat out the fourth quarter is one reason for the spurt. Many have pre-approved financing lined up and they wanted to take advantage of the rate they were offered.
While short-term borrowing costs increased again in January, negotiated medium-term mortgage rates, like the five-year fixed rate, have started to trend lower compared to the end of last year. This coupled with interest rate hikes likely on hold for the foreseeable future will prompt some buyers to jump back in. Although renewed market activity may be music to sellers’ ears, it’s posing challenges for some buyers as they remain cautious, as some price discovery takes place.
A tight labour market and strong population growth are expected to keep demand for housing strong, and TRREB points to policies like Mayor John Tory’s 2023 Housing Action Plan that are striving to increase supply, which could subsequently, and hopefully, bring improved affordability.
