Lack of affordability and uncertainty remained issues for many would-be home buyers in Toronto in October 2023. As a result, sales edged lower compared to last year. However, selling prices remained higher than last year’s levels.
Record population growth and a relatively resilient Toronto economy have kept the overall demand for housing strong. However, more of that demand has been pointed at the rental market, as high borrowing costs and uncertainty on the direction of interest rates has seen many would-be home buyers remain on the sidelines in the short term. When mortgage rates start trending lower, home sales will pick up quickly.
The Toronto Real Estate Board reported 4,646 Toronto home sales in October 2023 – down 5.8% compared to October 2022. On a month-over-month seasonally-adjusted basis, sales were also down in comparison to September.
New listings in October 2023 were up noticeably compared to the 12-year low reported in October 2022, but up more modestly compared to the 10-year average for October. New listings, on a seasonally-adjusted basis, edged slightly lower month-over-month compared to September 2023.
The October 2023 MLS® Home Price Index Composite benchmark and the average selling price were both up on year-over-year basis, by 1.4% and 3.5% respectively. On a seasonally adjusted basis, the MLS® HPI Composite benchmark edged lower compared to September 2023 while the average selling price remained at a similar level. Both the MLS® HPI Composite benchmark and average price remained above the cyclical lows experienced at the beginning of 2023.
Competition between buyers remained strong enough to keep the average selling price above last year’s level in October and above the cyclical lows experienced in the first quarter of this year. The Bank of Canada also noted this resilience in its October statement. However, home prices remain well-below their record peak reached at the beginning of 2022, so lower home prices have mitigated the impact of higher borrowing costs to a certain degree.
In the current environment of extremely high borrowing costs, it is disappointing to see that there has been no relief for uninsured mortgage holders reaching the end of their current term. If these borrowers want to shop around for a more competitive rate, they are still forced to unrealistically qualify at rates approaching 8%. Following their most recent round of consultations, the Office of the Superintendent of Financial Institutions should have eliminated this qualification rule for those renewing their mortgages with a different institution.
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”