The Craziness That Was 2022

As we start the New Year and reflect on the craziness that was the 2022 Real Estate Market, I outline the major factors that impacted homebuyers, sellers & renters across Toronto and the GTA. To describe the year in review as a ‘roller-coaster’ would be adequate. We saw the best of times from January to March, the worst of times from April to July, and a complete 180 from August until now!

During the height of the buying frenzy fueled by historically low interest rates, low inventory, and aggressive bidding wars, in February we saw the average sale price peak at around $1,334,000 across the GTA. By November, the average price of a home in the GTA was around $1,080,000.

March saw the beginning of the end of historically low interest rates. The Bank of Canada increased the interest rate from 0.25% to 0.50%, which continued in April, June, July, September, October and in December. As rates continued to increase, the mortgage stress test rate remained unchanged in 2022 which resulted in homebuyers paying roughly the same amount monthly, regardless of if they purchased at the beginning of 2022 or closer to the end of 2022.

As we watched the decline in the Toronto Real Estate market, many homebuyers anticipated a market crash, however this did not happen. Sellers who “needed to sell”, did so due to lifestyle changes such as births, deaths, marriages, divorce, and relocation, but not foreclosures. Home sellers who could not sell for the price they wanted opted for leasing their property, as rental demand went through the roof, literally. The increase in lending rates, combined with students returning to school, and professionals relocating and returning into Toronto’s urban core are factors which have increased demand in the rental market, along with rental rates. In the third quarter of 2022, the average rent for a one-bedroom condo increased by 20.4% year-over-year to $2,481. A two-bedroom apartment with two-washrooms increased to an average of $3,184; a 14.5% increase from 2021. Many sellers took their homes off the market and are waiting until springtime of this year to re-list in hopes of getting the price they wanted previously.

As the year continued, we did see a change in homebuyer behaviour. Homebuyers who became priced out of the market continued to save, and those able to get into the market refused to participate in the bidding wars; tipping the scales, giving some more balance between buyers and sellers, and making the homebuying process a bit more leisurely.

The Toronto 2022 real estate market has had a wild 2022. It's been a crazy mix of interest & inflation rate increases, wars, proposals of government policies, and not to mention both global & economic factors all coming together to influence Toronto’s real estate market. 

Nonetheless, real estate is unpredictable right now, and therefore this could mean great opportunities, whether you are interested in buying or selling a home. If you need some help, I’d love to connect!