toronto real estate

Toronto Real Estate Market Report

Toronto Real Estate Market Report – November 2022

Toronto Real Estate Market Report - November 2022

 

Real estate activity in November continued to be influenced by higher borrowing costs. Sales were down markedly compared to the same period last year, following the trend since interest rate hikes began in the spring. New listings were also down substantially from last year, and at a very low level historically.

GTA Realtors reported 4,544 sales in November 2022 – down 49% compared to November 2021 – but remaining at a similar level to October. New listings, at 8,880, were down on both a year-over-year basis and month-over-month basis.

This low supply of homes for sale has supported average selling prices at the $1.08 to $1.09 million mark since August. The fact that prices have stayed relatively steady for 4 months now indicates some level of acceptance of current market conditions.

The MLS Home Price Index was down by 5.5% year-over-year in November 2022. The average selling price for all home types combined was down by 7.2% year-over-year. Annual price declines continued to be greater for more expensive market segments, including detached and semi-detached houses.

Selling prices declined from the early year peak as market conditions became more balanced and buyers sought to mitigate the impact of higher borrowing costs. That being said, the marked downward price trend experienced in the spring has come to an end. Selling prices have flatlined since the summer.

Increased borrowing costs have been a short-term shock to the housing market. Over the medium- to long-term, the demand for housing will pick up again. The issue for policymakers will not be inflation and borrowing costs, but rather ensuring we have enough housing to accommodate population growth.

There has been some progress this year on related governance files such as the More Homes Built Faster Act. This is obviously good news. However, we need these new policies to turn into results over the next year. Otherwise, the current market lull will soon be behind us, population growth will be accelerating, and we will have done nothing to account for our growing housing need. The result would be enhanced unaffordability and reduced economic competitiveness.

 

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