toronto real estate

Toronto Real Estate Market Report

Toronto Real Estate Market Report – March 2023

Toronto Real Estate Market Report March 2023

 

Toronto Area real estate conditions tightened in March 2023. Sales accounted for an increased share of listings in comparison to March 2022, suggesting that competition between buyers is on the rise. The average sale price was above the average list price for the first time since May 2022.

As Q1 ended, real estate agents were increasingly reporting that competition between buyers was heating up in many neighbourhoods. The most recent statistics – and experience out there – bear this out. Recent consumer polling also suggests that demand for ownership housing will continue to recover this year. Look for first-time buyers to lead this recovery, as high rents push more into home ownership.

There were 6,896 sales through MLS in March 2023 – down 36.5% compared to March 2022. BUT – on a month-over-month basis, actual and seasonally adjusted sales were up. New listings were also down on a year-over-year basis, as we have seen for a long time, but by a much greater annual rate.

This points to tighter market conditions compared to last year. And whenever you have increasing demand and decreasing supply, it is almost impossible for there not to be upward pressure on prices. It might not be the 20-30% we’ve seen in previous years, but consistent 3% or 5% or even 10% increases will continue to keep prices out of the reach of many.

Recent financial market action has seen bond yields trend lower – which has caused (and will continue to cause) lower fixed rate mortgage rates. Lower borrowing costs will help affordability, especially as prices start to rise this spring.

The MLS Home Price Index was down by 16.2% year-over-year, but up month-over-month on both an actual and seasonally adjusted basis. Similarly, the average selling price was down by 14.6% year-over-year to $1,108,606. The average selling price was up month-over-month on an actual and seasonally adjusted basis.

As population growth continues at a record pace on the back of immigration, buying intentions remain strong. Because the number of homes for sale is expected to remain low, it will also be important to have substantial rental supply available. Unfortunately, this is not something we have at the present time. We need to see a policy focus on building more rental units – and housing of all sorts – over the next number of years.

 

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