The Greater Toronto Area (GTA) and forecast prices
Since the housing market in Greater Toronto Area (GTA) is predicted to maintain its equilibrium throughout 2023, according to ReMax, the demand is being propelled by move-up and move-over buyers.
What’s the trend for 2023?
This trend is expected to persist all throughout 2023, and single-detached homes continue to be the primary housing choice, with condo apartments following closely behind. ReMax (a Real Estate, Residential, and Commercial company located in Mississauga, Ontario), has estimated that forecast prices in the Greater Toronto Area would decline to their 2021 levels, an estimated 11 percent drop from the average overall.
Other marketing predictions included:
- 2023 Average Price: $1,061,853.91
- 2022 Average Price: $1,203,916.00
Significant developments in real estate GTA?
According to sources in the real estate market across GTA, several significant changes and developments will shape the market in 2023. These include interest rate increases, leading to price adjustments, an economic slowdown that would result in increased unemployment and an improved affordability offering fresh opportunities for buyers and sellers.
Buyers are to expect less competition, lower prices, and a wider selection of properties. As for sellers, they will be able to enjoy a trade-up advantage, fewer competing listings, and greater flexibility to move to the suburbs.
Drop in residential sales prices?
Re/Max further predicted a modest 3.3% drop in the average residential sales prices across the Canadian housing market in 2023, which was mostly due to the upward trend in interest rates and an impending recession.
In contrast to 2022, where most of the regions in the Greater Toronto Area had experienced an unbalanced market condition, 60% of the regions in GTA this year are to have a stable market due to the current economic state.
Housing unit prices in GTA decreased
Another development noticed by Royal LePage was that the majority of housing units in the Greater Toronto Area are expected to see a decrease in prices by the end of 2023. The report (a new housing forecast report by RL) also noted that the Bank of Canada has been aggressively raising interest rates, leading to declining prices across many Canadian markets.
Interest Rates and their effect
Although the rate of decline throughout has been modest, the aggregate real estate prices in the GTA are predicted to be two percent cheaper compared to the previous year. The COO of Royal LePage noticed that the city of Toronto and its surrounding regions had seen some of the steepest price declines in the country since interest rates began climbing earlier this year. It was further stated that home prices would still, however, remain out of reach for many would-be buyers, putting a lot of pressure on the rental market.
What the Toronto Region Real Estate Board forecasts
Based on the latest figures released by the Toronto Region Real Estate Board, the average price of properties of all types in November 2022 was $1,079,39, which represents a decline of 7.2% compared to November 2021 when the average price was $1,162,564. These statistics indicate a significant drop in property prices over the course of the year.
As per the latest housing market forecast by Re/Max Canada, there is a projection of a decline in the average home prices by around 12% in the Greater Toronto Area for the upcoming year.
Surveys and Research
Re/Max Canada conducted a survey to gauge Canadians’ views on the 2022 housing market and their expectations for 2023. The survey found that 54% of Canadians were confident that their financial situation would remain stable in the upcoming year. However, 38% expressed a lack of confidence, particularly among non-homeowners and lower-income households.
Additionally, 45% of respondents were concerned about the potential impact of further interest rate hikes on their ability to buy or sell a home in 2023.
The survey also revealed that 67% of Canadians had no plans to buy a home in early 2023, while 62% had no plans to sell due to current market conditions. Interestingly, 54% of Canadians believed that a two-year ban on foreign buyers would increase the supply of affordable homes for local buyers.
15% of Canadians were contemplating a move to another province in 2023 for more affordable housing, with non-homeowners being twice as likely to consider relocating.
The bottom line
It was noted that for the real estate market, normal trends would be expected to return soon. As more and more people are expected to buy into the market next year, interest rates should be able to stabilize, but the biggest challenge for prospective buyers would still be the lack of supply.
For this reason, a solution was provided: a significant boost in inventory that would satisfy sidelined demand and an increasing number of newcomers.
References:
- RE/MAX
- Royal LePage
- Norada
- Canadian Real Estate Magazine
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