Market Update for Feb. 17

There finally seems to be some optimistic news released from The Toronto Regional Real Estate Board (TRREB) for the year ahead. Considering all the doom and gloom that have made headlines in recent months, the second half of this year will see a gradual uptick in home sales and an increase in competition between buyers with a renewed upward pressure on home prices in the GTA. TRREB Chief Market Analyst Jason Mercer suggests that “it will be a year of two halves in 2023.”

“The first half will feel similar to the fall of 2022 due to the lingering effects of higher borrowing costs and related economic uncertainty. However, recent polling by Ipsos suggests buying intentions are edging up. The second half of 2023 should be characterized by an increase in demand for ownership housing, supported by lower fixed mortgage rates, a relatively resilient labour market, and record immigration,” continued Mercer.

The Ipsos data reveals that buyers are expecting to return to the market after a string of successive interest rate hikes from the Bank of Canada which sent buyers reeling and quickly cooled market conditions. Mercer expects that trend to reverse in the coming months.

2023 Market Outlook Highlights

• There will be a total of 70,000 sales which is below the 2022 result.

• The average selling price will reach $1,140,000 for all home types combined.

• Buying intentions are up slightly compared to last year, with 28 per cent of respondents indicating that they will consider purchasing a home in 2023.

• Listing intentions (those very likely or somewhat likely to list their home) for 2023 are up compared to 2022 for townhomes and similarly to 2022 condominium apartments and semi-detached houses. Listing intentions for detached homes appear to be trending lower.

On the back of record immigration supported by job creation in a diversity of sectors, the population of the Greater Golden Horseshoe (GGH) is set to climb 71 per cent by 2051. This obviously presents huge economic benefits, but also significant risks from the perspectives of housing supply, transportation, and other infrastructure.

“The GTA and surrounding GGH region are competitive globally in terms of economic, social, and cultural diversity. This is why people and businesses want to move here in record numbers. In order to sustain this growth, we need to ensure that we have an adequate and diverse supply of housing. This housing must be supported by the appropriate infrastructure. Recent policy initiatives at all levels of government seem to acknowledge this, but it’s time for these policies to actually translate into tangible results,” said TRREB President Paul Baron.