The Toronto real estate market has been on an upward trend for the past few years but is showing signs of slowing down. The latest forecasts suggest that the market is expected to remain relatively strong through the following year, although prices are slowly beginning to plateau. With that said, the Toronto real estate scene remains highly sought-after thanks to its strong job market, vibrant culture, and ample amenities.
Review of market trends in 2022
According to the Toronto Regional Real Estate
Board, while the average price of homes in the Greater Toronto Area increased from August to September 2022, the average price dropped by 4.3% compared to last year. As of September
, the average price of single-family homes was $1.369 million, the average price for condos was $730,818, and the average price of townhomes came in at $901,592. Each of these prices is a year-over-year decrease, with the exception of condos, which rose by 3.2%.
As the effects of the pandemic subsided through 2022 and interest rates began to climb, the Toronto real estate market started to show signs of prices and demand normalizing. A seller’s market continued; however, price increases tapered off compared to 2021, although they are still up from 2019 and 2020
In addition, there have been several signs
of a slowing market. Total residential transactions decreased by 44.1% from September 2021 to 2022. The total new listings also decreased by 16.7% year-over-year. Properties also spend 35 days on the market, which is 84.2% longer compared to September 2021, when properties were selling within just 19 days.
Home pricing forecast for 2023
As any real estate expert will admit, the Toronto housing market is constantly changing. It can be difficult to predict where prices will be even a year in advance.
However, the experts have shared their forecast
for the Toronto real estate market in 2023. They believe that prices will begin to decline by around 8.5% in 2023. Even though the market is cooling, prices still remain high overall, as well as interest rates. Also, while there has been a dip in prices since 2021, there is still an extreme shortage of new listings and available properties for sale in the Greater Toronto Area.
For these reasons, it's essential to be aware of your options and confer with a professional if you're considering buying a home in Toronto. They can help you understand the market and find the right property for you. With their help, you'll be able to make the most informed decision possible and be well on your way to locating your dream home.
Housing inventory forecast for 2023
The other side of the equation is the housing supply. As fewer owners put their homes on the market during the pandemic, we saw a decrease
in housing inventory levels across the Greater Toronto Area during that time.
At the beginning of 2022
, there were only 4,000 homes available for sale in a market with over 6 million residents. As the year progressed, more homeowners began putting homes on the market as concerns about the pandemic and the economy began to wane. The increased inventory led to a moderation
of price increases by mid-year.
By 2023, it is expected that housing inventory levels will continue normalizing, although the seller’s market will continue for some time. All things considered, another good year for the market is expected in 2023. The market is still good for those thinking about buying or selling a home or investment property. Current conditions remain very advantageous for sellers, as buyers are still willing to pay premiums for properties in excellent condition and in desirable locations. For buyers, it's important to be aware that competition is still on the high side for properties priced well. It's necessary to be prepared to move quickly when you find a property you're interested in. Our advice for buyers is to consult with an experienced realtor who can help them navigate the intricacies of the Toronto real estate market.
The real estate market is tightly bound to the economy and consumer confidence
, and heading into 2023, there are some concerns on both fronts. The Toronto job market remains robust and is expected to improve in the coming year, but consumer confidence suffers from the increased cost of living in Toronto, interest rates, and inflation. These factors are expected to temper demand, but no drastic declines are anticipated.
The market is forecast to cool off in the next few years as rising interest rates and inflation take a toll on consumer confidence. Many potential buyers are hesitating to enter the market, worried that they will lose their low interest rate if they sell now and have to get a new mortgage. With prices already high, the higher interest rates and inflation are making home ownership seem less affordable for many people. However, Toronto remains a desirable place to live, so the market is not expected to crash, and for those who can afford it, this may be a good time to buy.
Buying and selling in 2023
The Toronto real estate market is expected to remain healthy in the coming years, despite an anticipated slowdown in price increases and demand. Toronto is a desirable place to live, so the market is expected to stay tight, as the desirability of living in Toronto will buffer any significant downturn. Housing supply, especially for new construction, will likely remain below demand as well.
With the ever-changing real estate landscape, the expert team at KK Realty Group
would love to help you navigate these waters. Contact us for a consultation, and we'll help you develop a tailored plan to make the most of the current market conditions. If you're purchasing your first home or upgrading to your dream home, our experienced Toronto real estate agents
will assist you with finding the ideal property and getting the best possible price.*Header photo courtesy of Shutterstock