In September 2023, the Greater Toronto Area (GTA) real estate housing market experienced a combination of challenges and opportunities. High borrowing costs, rising inflation, uncertainty related to future Bank of Canada decisions, and slower economic growth continued to impact home sales in the region. Despite this, an increase in listings provided some relief, while the average selling price demonstrated year-over-year growth.

“The short and medium-term outlooks for the GTA real estate housing market are notably distinct. In the short term, consensus suggests that borrowing costs will remain elevated until mid-2024, after which they are expected to trend lower. This projection implies a potential surge in demand for ownership housing in the latter half of next year. Lower interest rates, coupled with robust population growth, are likely to stimulate increased buyer activity,” stated TRREB President Paul Baron.

In September 2023, TRREB REALTORS® reported a total of 4,642 home sales via the MLS® System, reflecting a 7.1 percent decrease compared to the same period in 2022. The decline in sales was most noticeable for ground-oriented properties, particularly semi-detached houses and townhouses. Additionally, month-over-month seasonally-adjusted sales figures also indicated a slight decrease.

However, new listings witnessed a substantial year-over-year increase, partly due to the exceptionally low inventory levels in September 2022. The number of listings also displayed an upward trend when analyzed on a month-over-month seasonally adjusted basis.

The MLS® Home Price Index (HPI) Composite benchmark exhibited a 2.4 percent year-over-year increase, while the average selling price experienced a three percent rise during the same period. On a month-over-month seasonally-adjusted basis, both the average selling price and the MLS® HPI Composite benchmark saw marginal decreases of less than one percent.

“GTA home prices have remained above the trough observed in early 2023. However, we observed a more balanced market during the summer and early fall, with listings increasing significantly relative to sales. This suggests that, at least in the short term, some buyers may have enhanced negotiating power, potentially mitigating the impact of high borrowing costs,” noted TRREB Chief Market Analyst Jason Mercer.

It’s worth highlighting that TRREB’s annual consumer polling indicates that approximately half of prospective home buyers in Toronto are first-time buyers each year. Meanwhile, the average price of a condo apartment in Toronto exceeds $700,000. However, the first-time buyer exemption threshold for the City’s upfront land transfer tax has remained at $400,000 for fifteen years. In light of this, TRREB commends Toronto City Council for requesting a report on a more appropriate exemption level going forward. TRREB CEO John DiMichele emphasized the need for government policies at all levels to align and collaborate to address the ongoing housing crisis.

In summary, the GTA real estate housing market in September 2023 faced challenges but also showed resilience and potential for growth in the coming months, particularly as borrowing costs are expected to decrease, stimulating demand. Balancing the market and addressing affordability concerns will remain key priorities for both industry stakeholders and policymakers.

Whether you’re a homeowner looking to determine the fair market value of your property, a real estate agent seeking to set the right listing price, a lender assessing collateral value, or a legal professional navigating complex property disputes, we are here to serve you. Our commitment to meticulous research, adherence to industry standards, and dedication to ethical practices sets us apart.