Despite the continued housing market transition to a higher borrowing cost environment, the average selling price in the Toronto found some support near $1.1 million since the late summer. Toronto condo and loft sales continued to adjust to substantially higher interest rates in October 2022, both on an annual and monthly basis. However, new listings are also down year-over-year and month-over-month. The persistent lack of inventory helps explain why the downward trend in home prices experienced in the spring has flattened over the past three months.
The Toronto Real Estate Board reported 4,961 sales in October 2022 – a similar number to September 2022 but down by 49.1% compared to October 2021. Year-over-year sales declines were similar across major market segments.
New listings were down by 11.6% year-over-year and reached an October level not seen since 2010. New listings were down on an annual basis more so for mid-density and high-density home types, which helps to explain why prices have held up better in these categories compared to detached houses.
With new listings at or near historic lows, a moderate uptick in demand from current levels would result in a noticeable tightening in the resale housing market in short order. Obviously, there is still a lot of short-term economic uncertainty. In the medium-to-long-term, however, the demand for housing will rebound. Public policy initiatives like the recently introduced provincial More Homes Built Faster Act and strong mayor provisions will help ensure we see more homes being built to affordably meet the needs of new households.
The MLS® Home Price Index (HPI) Composite Benchmark was down by 1.3% year-over-year in October 2022. The average selling price for all home types combined, at $1,089,428, was down by 5.7% compared to October 2021. The monthly trends for both the MLS® HPI Composite and the average selling price have flattened in recent months following steeper declines in the spring and early summer.
Condo and loft prices in Toronto have found support in recent months because price declines in the spring and summer mitigated the impact of higher borrowing costs on average monthly mortgage payments. The Bank of Canada’s most recent messaging suggests that they are reaching the end of their tightening cycle. Bond yields dipped as a result, suggesting that fixed mortgage rates may trend lower moving forward, which would help affordability.
If you want to buy or sell a Toronto condo or loft, contact Casey Ragan at 416-486-5588 or by email at casey@remaxhallmark.com
Casey Ragan
“Toronto’s Condo Authority”