Lack of affordability and uncertainty remained issues for many would-be home buyers in the Greater Toronto Area 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 GTA economy have kept the overall demand for housing strong. However, more of that demand has been pointed at the rental market, as high borrowingcosts and uncertainty on the direction of interest rates has seen many would-be home buyers remain on the sidelines in the short term.
Realtors reported 4,646 GTA home sales through the MLS System in October 2023 – down 5.8 per cent compared to October 2022.
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.
The October 2023 average selling price was up on year-over-year basis, by 1.4 per cent and 3.5 per cent respectively. The current average selling price for a detached home in Toronto sits at $1,125,928.
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.
Higher borrowing costs have definately taken a toll on the market overall. Prices have come down somewhat in certain markets of Toronto and opportunities are arising for buyers with large downpayments who don't require large amounts of financing. Potential home sellers who are seeing the effect of higher borrowing costs effecting their lifestyles are gearing up to list their properties for sale in fear of further potential declines in the average price coming in the near future.
If you are a first time buyer with a good downpayment now may be a good time to take advantage of the slower more balanced market and setup shorter term financing or perhaps see if you can seek vendor take back financing when negotiating a purchase. You may be able to benefit from the current market environment.
If you are a potential seller who has seen a large price gain in your real estate holdings and you have financed a large amount which is coming up for renewal in the next year or two you may want to consider taking the gain and seeing if you can put the gain to use where it would yield a better return over the next couple of years.
If you have questions on the real estate market or what options are best for your real estate holdings feel free to call or email me to discuss your options. Like any other investment your real estate holdings should be evaluated on a yearly basis.
Have a great day!