TORONTO REGIONAL MARKET REPORT – MARCH 2023

 As we are greeted with the warmer weather, and the arrival of the spring market, I have personally seen a lot more activity between buyers and sellers in comparison to weeks prior. Although the recent slow down in the market can be attributed to the consistent rate hikes, and economic uncertainty, low inventory levels and increased first time home buyer participation has seen the return of ‘bidding wars’ in certain markets. 

The reality is many buyers may be waiting for more inventory to become available or for prices to potentially drop, while sellers may be hesitant to list their properties amidst the uncertain conditions.  It will be interesting to analyze market activity in the upcoming weeks and months ahead, amidst the second consecutive interest rate pause announced by the Bank of Canada on April 12^th. 

Greater Toronto Area (GTA) housing market conditions tightened in March 2023. Sales accounted for an increased share of listings in comparison to March 2022, suggesting that competition between buyers is on the rise. The average sale price was above the average list price for the first time since May 2022.

“As we moved through the first quarter, Toronto Regional Real Estate Board (TRREB) Members were increasingly reporting that competition between buyers was heating up in many GTA neighbourhoods. The most recent statistics bear this out,” said TRREB President Paul Baron. “Recent consumer polling also suggests that demand for ownership housing will continue to recover this year. Look for first-time buyers to lead this recovery, as high average rents move more closely in line with the cost of ownership.”

“Lower inflation and greater uncertainty in financial markets has resulted in medium-term bond yields to trend lower. This has and will continue to result in lower fixed rate borrowing costs this year. Lower borrowing costs will help from an affordability perspective, especially as tighter market conditions exert upward pressure on selling prices in the second half of 2023,” said TRREB Chief Market Analyst Jason Mercer.

The MLS® Home Price Index composite benchmark was down by 16.2 per cent on a year-over-year basis, but up month-over-month on both an actual and seasonally adjusted basis. Similarly, the average selling price was down by 14.6 per cent year-over-year to $1,108,606. The average selling price was up month over-month on an actual and seasonally adjusted basis.

“As population growth continues at a record pace on the back of immigration, first-time buying intentions will remain strong. Because the number of homes for sale is expected to remain low, it will also be important to have substantial rental supply available. Unfortunately, this is not something we have at the present time. We need to see a policy focus on bringing more purpose-built rental units on line over the next number of years,” said TRREB CEO John DiMichele.

• MARCH TRREB Market Report