TRREB’s January Real Estate Data.
Toronto, February 9th, 2023
By Ivan Kalinin
LISTINGS OF NEW HOMES FOR SALE ARE UP 88% SINCE DECEMBER – RETURNING TO PRE-PANDEMIC LEVELS
The last 3 years in the real estate market and let’s face it, in all aspects of the way we humans live our lives, have been all sorts of different. It has certainly been a turbulent, bumpy ride – and far from boring, what a time to be alive…
This year however, real estate markets in the Toronto and GTA have started to show signs of movement. There has been an uptick in demand, even though the interest rates have been raised to the levels where it stopped making any logical sense.
According to the Toronto Real Estate Board President, Paul Baron, we are soon to see increased activity on the market and the prices and sales are expected to pick up in the foreseeable future:
“Home sales and selling prices appear to have found some support in recent months. This coupled with the Bank of Canada announcement that interest rate hikes are likely on hold for the foreseeable future will prompt some buyers to move off the sidelines in the coming months. Record population growth and tight labour market conditions will continue to support housing demand moving forward,”
To add to that point, all 3 levels of government have announced policies to enhance housing affordability and mitigate the effects of higher borrowing costs. I made a video on the 8 housing initiatives that are coming out this year, so make sure to check it out.
Listings of New Homes For Sale Are Approaching the January 2020 Levels
January is usually still a slower month in the real estate sphere. It takes a few weeks for the buyers to direct their attention back onto the market after the holidays. Sellers too have no desire to list their homes during that time either, so new listings are relatively scarce that time of year. Coupled with the quantitative tightening policy, it was safe to assume that new listings would drop like a rock this year.
But don’t forget we are witnessing unprecedented times here, so of course this time is different. This January listings of new homes for sale jumped 88% since December 2022, (7,688 new listings in January vs 4,074 in December).
8 rates hikes and a pandemic ago, this number of listings had been seen in January 2020 – there were 7,836 new listings popping up that month. The latest Bank of Canada announcement that the rate hikes will be paused and that we will see rate cuts sooner than we think, this caught the attention of the sideline buyers. Of course, the sellers picked up on that and released their inventory to accommodate the renewed demand.
The Rise of the Sideline Buyer – Fixed Rates Are Dropping
In January, there was a sideway movement in prices month over month. Detached home prices dropped by 9.5% in Toronto and 1% in the GTA. But the price of townhouses experienced a little bump in Toronto and semis and condo apartments in the GTA are up 1.7% and 2.1%, respectively.
It seems that the buyers are expressing the most interest in the properties under the $800,000 levels. As the fixed rates are dropping, this gives more purchasing power to the buyers and we may see the demand and prices starting to pick up in spring.
This coupled with the dovish sentiment coming from the Bank of Canada signifying a very likely policy pivot in the upcoming weeks, will prompt buyers to move from the sidelines to come out and play at last. And not to beat this horse to death, but the record high immigration will to continue to support this demand moving forward.
TORONTO REAL ESTATE MARKET STATS
THE GTA REAL ESTATE MARKET STATS
If you like talking real estate half as much as I do and are going to participate in the market in 2022, come chat and have a coffee. And if you are looking for a property as an investment, remember our super-popular private investment tours now booking in early 2022. Click here to book.
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.