While the overall demand for housing remained buoyed by record immigration in 2023, more of this demand was pointed at the rental market. The number of Toronto home sales in 2023 came in at less than 70,000 due to affordability issues brought about by high mortgage rates.
High borrowing costs coupled with unrealistic federal mortgage qualification standards resulted in an unaffordable home ownership market for many households in 2023. With that said, relief seems to be on the horizon. Borrowing costs are expected to trend lower in 2024. Lower mortgage rates coupled with a relatively resilient economy should see a rebound in home sales this year.
There were 65,982 home sales reported in 2023 – a 12.1% dip compared to 2022. Despite an uptick during the spring and summer, the number of new listings also declined in 2023. The trend for listings has been largely flat-to-down over the past decade, which is problematic in the face of a steadily growing population. On a seasonally adjusted monthly basis, sales increased compared to November, while new listings declined for the third straight month.
The average selling price for all home types in 2023 was $1,126,604, representing a 5.4% decline compared to 2022. On a seasonally adjusted monthly basis, the average selling price edged higher, while the MLS® Home Price Index Composite edged lower.
Buyers who were active in the market benefitted from more choice throughout 2023. This allowed many of these buyers to negotiate lower selling prices, alleviating some of the impact of higher borrowing costs. Assuming borrowing costs trend lower this year, look for tighter market conditions to prompt renewed price growth in the months ahead.
Record immigration into Toronto in the coming years will require a corresponding increase in the number of homes available to rent or purchase. People need to have comfort in knowing that they can plan their lives and future with the certainty that they will have the stability of an affordable place to live.
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”