Monday, June 26, 2023 / by Matthew Daniel Tamburello
Matthew Daniel Tamburello
Team Leader & Broker
To help you navigate the ever-changing GTA real estate market, we are exploring some GTA real estate trends from the data collected in February 2023. The market experienced a substantial decline in home sales in February 2023 compared to the same month in the previous year, as a result of higher borrowing costs and a decrease in new listings. However, the average selling price and MLS® HPI remained stable, thanks to the shift towards lower-priced homes by homebuyers. As you navigate the GTA real estate market, understanding the factors contributing to the decline in home sales and what the future holds for the market can help you make informed decisions.
Factors Contributing to the Decline in Home Sales
The Toronto Regional Real Estate Board (TRREB) reported a 47% decrease in home sales in February 2023 compared to February 2022. The decrease in home sales is attributed to higher borrowing costs and a decrease in new listings. The Bank of Canada has been raising interest rates since early 2022, which has led many homebuyers to opt for lower-priced homes to offset these costs. Additionally, the number of new listings entered into the system in February 2023 was down 40.9% compared to the same month in the previous year.
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Stable Average Selling Price and MLS® HPI
The stable prices of the GTA real estate market, despite the decline in home sales, are an interesting example of current GTA real estate trends. The average selling price for February 2023 remained stable at $1,095,617, indicating the market’s resilience. Similarly, the MLS® Home Price Index (HPI) Composite Benchmark was down at a similar annual rate of 17.7% but up on a monthly basis. These stable prices can be attributed to the current GTA real estate trends, including the shift towards lower-priced homes by homebuyers and the decrease in new listings.
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Future of the GTA Real Estate Market
Looking towards the future of the GTA real estate market, TRREB Chief Market Analyst, Jason Mercer, predicts that buying intentions will pick up for 2023. However, this increased demand will run up against a constrained supply of listings, which will eventually lead to renewed price growth in many segments of the market. Innovative solutions such as the City of Toronto’s initiative to allow duplex's, triplex's, and fourplex's in all neighbourhoods citywide will need to come to fruition to achieve an adequate and diverse housing supply that will support record population growth in the years to come. As these GTA real estate trends evolve, staying informed and proactive can help you make the most of your investment.
Key 2023 Market Highlights
- 2023 sales: 4,783 (-47%) vs. 2022 (9,028)
- New Listings: 8,367 (-40.9%) vs. 2022: (14,153)
- Active Listings: 9,643 (+38.1%) vs. 2022: (6,984)
- Days on Market: 22 days (+144.4%) vs. 2022 (9 days)
- Average Selling Price: $1,095,617 (-17.9%) vs. 2022 ($1,334,062)
- Detached Homes: $1,439,735 (-19.9%), sales: 2,075 (-46.6%)
- Semi-detached Homes: 399 (-46.5%), avg. price: $1,069,266 (-21.4%)
- Townhomes: 821 (-47.4%), avg. price: $934,834 (-16.7%)
- Condo Apartments: 1,455 (-47.3%), avg. price: $705,472 (-11.8%)
In conclusion, the GTA real estate market saw a substantial decline in home sales in February 2023 compared to the same month in the previous year. The decline in home sales can be attributed to higher borrowing costs and a decrease in new listings. Despite this, the average selling price and MLS® HPI remained stable due to the shift towards lower-priced homes by homebuyers. The future of the GTA real estate market will depend on innovative solutions to increase the housing supply to meet the increasing demand.
As the GTA real estate market evolves, we will be here to help you stay ahead of the curve. Contact us today to learn more about how we can help you navigate the changing market and find your dream home.