Toronto Housing Market

GTA home sales have plummeted by nearly 50% year over year in November, as mortgage rates continue a relentless climb in Canada. Home prices on the other hand have not reclined as much since their peak last spring.

Remax has forecasted a price drop of 11.4% in 2023 due to a reduction in demand for homes.

See more on home price changes over time for each of the Toronto districts below. Some communities have seen strong price growth in the last two months which are counter to the general price declines across the GTA.

And mortgage costs are the big story in Toronto real estate. The Bank of Canada rose it’s key lending rate by 50 basis points again yesterday which means mortgage payments will once again be on the rise. B of C indicated they expect further rate hikes to come.

The fact homes are still priced above $1 million on average means a household income of over $200,000 per annum is needed to buy a house today (according to ratehub). As this graphic from ratehub.ca shows, rates are not far from those of the great recession on 2008. Higher rates are bound to sink the Toronto housing market through the winter.

The catalyst for higher rates will come as inflation rises again and public pressure is applied, likely in the spring.  Lower corporate earnings will likely spur layoffs in January, February and March further lightening buyer intent.

 

Mortgage rates in Canada last 15 years.
Mortgage rates in Canada last 15 years. Screenshot courtesy of ratehub.ca

Zolo reports home prices have dropped 2% in the last week and are down 3.7% in the past 12 months. They report detached house prices are down 12% and condo prices are down 4% in the past month.  They also report average days on market for homes priced between $500k and $2.5 million has doubled. They show townhouses have seen average price rise by $50,000 in the past few months.

Zolo reports all negative growth rates in the past year with Markham, Oakville, King and Mississauga having the least reductions in price.

Zolo shows a strong price reduction trend in areas northwest of Toronto, which may reflect a return to work in Toronto.

Toronto Sales Price Stats in November 2022

Year over year home prices dropped almost 14% in the 416 area code while in the 905 area, prices dropped about 11%.

TRREB’s President TRREB President Kevin Crigger had called for the Federal Government to remove the mortgage stress test to allow more buyers to buy homes. Yet, with an artificial recession being engineered, it might be wise for anyone at risk to stay out of the market for now. And plenty of homebuyers are on the sidelines.

With inflation not subsiding and a flood of immigrants expected in 2023 and 2024, housing prices will not recline by much.

Toronto unemployment is strong with a 6.2% jobless rate in November.  Canadian wages as a whole rose 5.6% although that is much less than inflation at 6.9% in November.

If the Toronto economy heats back up in summer 2023, and the housing market is fueled by immigrant buyers, it likely will ad to inflation numbers. With oil markets in tight supply, the cost of fuel will likely be up substantially too. Food has been stubbornly high and winter is typically not a booming production period for produce and fruit, so expectations for disappearing inflation may not hold water.

Sales, DOM, Selling Price, and New Listings.
Sales, DOM, Selling Price, and New Listings. Screenshot courtesy of TRREB.

Detached houses are the preferred housing type yet sales have plummeted 29.5% year over year. Townhouses suffered had sales drop 37.77% overall and 44.0% in the 416 region alone. Semi detached suffered less reductions in sales being down 29% across the GTA.

Toronto Housing Stats for each area code.
Stats for each GTA area code. Screenshot courtesy of TRREB.

We can say the Toronto housing market is in its worst shape than ever although listings have managed to rise.

Toronto home prices chart last 10 years. Screenshot courtesy of TRREB.

House Sales Drop in November

GTA region housing state in November. Detached homes.
GTA region housing state in November. Detached homes. Screenshot courtesy of TRREB.
Toronto city district detached home sales and prices in November. Screenshot courtesy of TRREB.

Homeowners Intent to Sell

Surveys of homeowners suggested a strong intent to sell in the last 6 months, however that simply did not come true. Sales are down, listings are few despite that right now is an ideal time to sell.

Will Toronto home prices fall in 2023 as a recession quickly approaches?  What will be saying about price forecasts as we look back at 2022.  How fast could prices drop? And what is the risk of a housing market crash in Toronto? See the Calgary housing market and Vancouver housing market reports for comparison.

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Although the recovery was poised to take off this spring, rising interesting rates, an ailing and debt loaded small business sector teetering on collapse, fast rising inflation and too high gasoline prices, along with fears of stagflation are coloring a vastly different forecast for markets.  These factors may deter many buyers from buying at home at what is the peak of the market. Few are talking about a housing market crash, but some are wondering about 2023.

GTA City by city home prices (data courtesy of TRREB)

As the chart reveals, price declines were steepest in the last month in Whitchurch/Stouffville, Brampton, Milton, Whitby and Ajax have enjoyed 20% or more in home sale value in the last 3 months.   Burlington, Toronto West, Brampton, Georgina, Stouffville, Richmond Hill, and Whitby have seen the strongest price growth in last 5 years.

Toronto Region Cities November 2022 August 2022 March 2022 August 2017 Price Change last 2 Months
Price Change Last 5 years
Burlington $1,476,310 $1,519,733 $1,638,040 $944,564 -3% 56%
Halton Hills $1,160,736 $1,266,831 $1,564,270 $984,812 -8% 18%
Milton $1,434,733 $1,232,179 $1,712,357 $866,650 16% 66%
Oakville $1,434,733 $2,163,399 $2,362,508 $1,314,363 -34% 9%
Brampton $1,197,119 $1,188,060 $1,573,497 $766,831 1% 56%
Caledon $1,197,119 $1,529,900 $1,903,025 $1,028,591 -22% 16%
Mississauga $1,427,501 $1,521,265 $1,756,910 $1,066,015 -6% 34%
Toronto West $1,560,548 $1,648,298 $1,683,450 $919,916 -5% 70%
Toronto Central $2,236,273 $2,609,829 $2,725,902 $2,113,130 -14% 6%
Toronto East $1,226,910 $1,187,602 $1,529,864 $887,620 3% 38%
Aurora $1,507,187 $1,483,702 $1,981,617 $1,144,094 2% 32%
E Gwillimbury $1,320,867 $1,375,136 $1,621,299 $966,047 -4% 37%
Georgina $1,320,867 $894,234 $1,130,155 $604,838 48% 118%
King $2,662,476 $2,403,002 $2,737,753 $1,768,333 11% 51%
Markham $1,767,936 $1,697,462 $1,997,702 $1,319,860 4% 34%
Newmarket $1,767,936 $1,220,136 $1,552,840 $901,055 45% 96%
Richmond Hill $1,840,276 $1,819,159 $2,051,273 $1,466,884 1% 25%
Vaughan $1,840,276 $1,689,358 $2,044,573 $1,348,649 9% 36%
Whitchurch Stouffville $1,742,244 $1,566,208 $1,978,605 $1,024,941 11% 70%
Ajax $1,067,719 $1,051,887 $1,373,496 $708,185 2% 51%
Brock $713,450 $759,846 $1,057,415 $508,615 -6% 40%
Oshawa $930,188 $855,400 $1,099,404 $550,677 9% 69%
Pickering $930,188 $1,267,690 $1,511,459 $812,643 -27% 14%
Scugog $833,327 $963,147 $1,298,531 $719,375 -13% 16%
Uxbridge $1,344,389 $1,421,100 $1,560,469 $792,233 -5% 70%
Whitby $1,344,389 $1,083,635 $1,399,956 $733,811 24% 83%
Orangeville $833,818 $875,952 $1,194,537 $612,974 -5% 36%
Bradford West Gwill $1,042,105 $1,151,654 $1,458,031 -10%
Innisfil $892,423 $900,739 $1,230,745 $549,492 -1% 62%

 

Zolo’s report indicates shows a $200,000 price drop from 3 months previous for all detached houses sold in the GTA. Condo prices fell $13,000 overall except for 2 bedroom units which rose $12,000 on average.

Toronto home prices by number of bedrooms in November 2022.
Toronto home prices by number of bedrooms. Screenshot courtesy of

Housing Affordability Can be Eased if Homeowners Decide to Cash in on the Bonanza

It’s a frightening context for real estate and housing given rental listings are down significantly from last year. This is a crisis of significant proportions given immigrants are pouring in over our borders.  Homeless deaths rocketed over 200 last year.

The issue of NIMBYism and municipal regulations is clouding the housing market forecast for Toronto, Mississauga, Brampton, Markham, and the rest of York Region. Doug Ford announced the recently passed Bill 23: More Homes Faster Act which may help if the effort is sincere. Still with hundreds of thousands of new immigrants entering the GTA to live in the next 2 years, it may be too little too late.

The lack of outcry about housing prevention in the GTA area is alarming.  Builders are already pulling back on construction projects due to expected buyer withdrawal and economic recession.   Politicians and wealthy homeowners may not want to see real estate values fall, and they have a belief in a high density/high cost, anti-sprawl agenda.

TREBB’s President Kevin Crigger knows it and reiterated what his predecessors said many times “Evidence-based decision-making should inform government policies, and we encourage representatives at all levels of government to think big and act decisively to improve needed housing supply in a significant way.

So when homeowners do sell their homes and condos, it is the best short term solution to the housing crisis in Canada.

Remax 2023 Toronto Housing Forecast

Remax forecasts home prices in Toronto will fall 11.8% by end of 2023 and only 5% in Mississauga.

Right now is a good time time to sell your home. just before an expected drop this winter and spring. And you can sell your home fast with perhaps no commission, or sell it for more using a Realtor with a strong digital marketing strategy.

The Toronto condo segment has recovered well and is expected to continue given the shortage of units, the demand from new immigrants, returning workers to the high density housing in GTA urban areas (Toronto).

The lack of housing supply is making finding a home in the GTA very difficult. It is real estate in Vaughan, Bradford, Newmarket, Aurora, Richmond Hill, Milton, Stouffville, Pickering and Whitby that everyone is after.

Interestingly though, CMHC with its Toronto real estate market crash style scenario. CHMC said Toronto (and Vancouver homes) are highly overvalued and a drop of prices in the neighbourhood of 20% is coming.

With mortgage rates so low, there’s a desperation among young buyers to buy and lock in at low rates.

With mortgage rates at historic lows and loan refinancing still frequent, the market is loosening up. However, with Covid still actives, US trade tensions heightening, and the US election in two months, we’re hearing more talk about a housing market crash. And a Toronto housing market crash is possible if the US economy should collapse.

As you can see in the monthly Toronto GTA region prices and sales details, upward momentum is strong.  The growth in prices in each regions is astonishing and there is little to suggest it will slow into the fall season.

See more on the Vancouver real estate market, Calgary real estate market, Okanagan real estate market and the York region real estate market.

Compare Toronto’s property market outlook to the US housing market forecast.  You can view the prices for each city and MLS district below. Also, keep an eye on Toronto condo prices as the pandemic passes.

Homebuyers are still willing to look beyond the green spaces belt, but they’ll look at Aurora, Bradford, Stouffville, and Newmarket first before heading north.

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