TRREB’s December Real Estate Data.
Toronto, January 16th, 2023
By Ivan Kalinin
MLS listings in December’s housing market in Toronto and the GTA had experienced a trend that was a stark contrast to the record levels of 2021. As the Bank of Canada had been crushing the demand by hiking the interest rates all throughout 2022, the supply of inventory adjusted accordingly. As a result, the market has been trading sideways since August of 2022.
High level breakdown of MLS listings in December 2022:
- 3,117 sales, down 48.2% compared to December 2021
- 4,074 new listings, down 21.3% year over year
- The average price in Dec 2022 was $1,051,216, down 9.2% compared to Dec 2021 ($1,157,837)
Those seeking the bottom of the market, trying to time it for the best moment to strike may have been standing right in the middle of it without realizing. Paul Baron, TRREB President commented: “home prices started levelling off in the late summer, suggesting the aggressive early market adjustment may be coming to an end”.
There were just over 75,000 sales reported in 2022 – 38% less year over year (122,000 in 2021). As expected, there was a drop of about 8% in the total new listings that came out to the market. The interest rate hikes also were the culprit to the double-digit average rent increases. Many people were simply pushed out of the market and were forced to rent at historically high rental rates known to date.
While the amount of sales took a significant haircut in 2022, MLS listings times have more than doubled, experiencing a 110.5% increase in average property days on the market. Another indicator pointing and the slow pace of the market. That being said, historically this has also been an indicator for a busier January. As of the time of writing this, the market has significantly improved already and I am starting to see multiple offers on properties.
Believe it or not, the average sale price in 2022 ($1,189,850) was up by 8.6% compared to 2021 ($1,095,333). The growth was based on a very strong start of the year. That growth had winded down significantly once the BoC had started its tightening policy in March.
Toronto condos are showing a solid resilience in the face of a tightening policy
If there was an asset type that proved its durability time and time again during the shifting market, it was certainly condo apartments. The average price of condo apartments in the 416 and 905 in December was $741,584 and $633,135 respectively, down only 0.9% total year-over-year. That being said, the sales declined by 52.9% since 2021.
2023 will be an interesting market to watch, as we have 2 combating forces that are present in the market. On one hand, the high interest rates will continue to impact the demand. Contrary to that, the massive immigration into the province will support the demand levels.
Let’s not forget that we are still experiencing a severe shortage of housing in the province. The high building costs only exacerbate this, as developers are pausing their projects. It’s simply not worth it for them to proceed building new housing units when borrowing costs, the costs of materials and labor are that high.
And even though the government is trying to help alleviate these challenges with legislation such as More Home Built Faster Act, the development application process remains clunky and inefficient. Let’s how this all unfolds in the new year, but in the meantime HAPPY NEW YEAR!!!
TORONTO REAL ESTATE MARKET STATS
THE GTA REAL ESTATE MARKET STATS
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Ivan Kalinin is a sales agent at Key Toronto Real Estate Group. Zoocasa Realty Inc. – Brokerage independently owned and operated, He can be reached at 416 858 8085. Not intended to solicit clients already under contract.