toronto real estate

Toronto Real Estate Market Report

Toronto Real Estate Market Report – November 2023

November 2023 Toronto Real Estate Market Report

 

High borrowing costs and uncertain economic conditions continued to weigh on GTA home sales in November 2023. Sales were down year-over-year, while listings were up from last year. With more choice in the market, selling prices remained basically flat year-over-year.

Current trends has Toronto on pace for the lowest annual number of sales in 20+ years. Surprisingly, though, prices have been up year-over-year for 6 consecutive months.

Elevated borrowing costs have really taken their toll on the interest rate-sensitive housing market. However, it does appear relief is on the horizon. Bond yields have been trending lower and forecasters are anticipating Bank of Canada rate cuts in the first half of 2024. Lower rates will help alleviate affordability issues in the short term, though they are likely to spur price increases.

There were 4,236 MLS sales in November 2023 – a 6% decline compared to November 2022. Over the same period, the number of new listings was up by 16.5%. On a seasonally adjusted monthly basis, sales edged up compared to October 2023, while new listings were down by 5.5%.

The MLS Home Price Index and the average selling price, at $1,082,179, in November 2023 were basically flat in comparison to November 2022. But the tiny rise 0.3% did make it 6 straight months of year-over-year average price increases.

It is safe to say that home prices have adjusted from their peak in response to higher borrowing costs and settled into some sort of new normal. This has provided some relief for buyers, from an affordability perspective, though mortgage rates (and monthly payments) are still the main barrier to purchasing.

As mortgage rates trend lower next year and the population continues to grow at a record pace, expect demand to begin increasing again. This will eventually lead to renewed growth in home prices.

We know the demand for homes, both rental and owned, will continue to grow. We have seen some productive policy decisions recently that should help with housing affordability, though it will take many years for them to have any noticeable effect.

 

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