Toronto Real Estate Market Update: Key Trends and Insights for April 2023


The Toronto housing market has experienced its fair share of ups and downs over the past year, with volatile home prices and rising mortgage rates. However, recent home sales data indicates that this spring could be a promising season for buyers as well as sellers. 


What happened in March 2023?

The Toronto real estate market experienced a massive shift between March 2022 and March 2023. While the home prices were significantly lower year-over-year, there was an improvement in sales and prices month-over-month. 


According to the latest report from Toronto Regional Real Estate Board (TRREB), the average home price reached a high of $1,298,666 in March 2022. However, by February 2023, the average home price dropped significantly to $1,096,519, a decrease of approximately 15.5%. This decline indicates that the market was experiencing a correction, with the potential for lower demand, higher interest rates, or a combination of factors contributing to the decrease in home prices.


By March 2023, the average home price saw a slight increase to $1,108,606, a 1.1% rise compared to the previous month. While this increase is not substantial, it may suggest that the market is stabilizing, with buyers and sellers finding a new equilibrium in terms of pricing. The slight uptick in home prices could also be a result of increasing buyer confidence and the return of competition in the market.


The competition among buyers has increased and conditions tightened. The average sale price surpassed the average list price for the first time since May 2022, suggesting a recovery in demand for ownership housing. This resurgence is primarily driven by first-time buyers as high average rents are becoming more closely aligned with the cost of homeownership.


Although reported sales through TRREB's MLS® System experienced a 36.5% decline compared to March 2022, both actual and seasonally adjusted sales increased month-over-month. Conversely, new listings faced a larger annual rate of decline, signifying tighter market conditions. This tightening has resulted from a combination of factors, including lower inflation, increased financial market uncertainty, and downward trending medium-term bond yields, which in turn have led to lower fixed-rate borrowing costs.


Consequently, affordability is expected to improve, particularly as tighter market conditions drive selling prices upward in the latter half of 2023. Despite the MLS® Home Price Index composite benchmark decreasing by 16.2% year-over-year, it showed month-over-month increases on both actual and seasonally adjusted bases. Similarly, the average selling price experienced a 14.6% decline year-over-year to $1,108,606 but rose month-over-month on actual and seasonally adjusted bases.


The Toronto real estate market in March 2023 saw a tightening in conditions and increased competition among buyers. Although sales and average home prices experienced year-over-year declines, month-over-month increases suggest a recovering market. First-time buyers, driven by high rents and population growth, are fueling this resurgence. However, the current rental supply is inadequate, highlighting the need for policy changes to encourage the development of purpose-built rental units.


“As we moved through the first quarter, TRREB members were increasingly reporting that competition between buyers was heating up in many GTA neighbourhoods. The most recent statistics bear this out,” said TRREB President Paul Baron. “Recent consumer polling also suggests that demand for ownership housing will continue to recover this year. Look for first-time buyers to lead this recovery, as high average rents move more closely in line with the cost of ownership.”


“Lower inflation and greater uncertainty in financial markets have resulted in medium-term bond yields trending lower. This has and will continue to result in lower fixed-rate borrowing costs this year. Lower borrowing costs will help from an affordability perspective, especially as tighter market conditions exert upward pressure on selling prices in the second half of 2023,” said TRREB Chief Market Analyst Jason Mercer. 


TRREB CEO John DiMichele emphasized the need for an adequate rental supply to accommodate the growing demand from first-time buyers, driven by record population growth through immigration. He urged policymakers to implement changes that would encourage the development of more purpose-built rental units in the coming years, as the current rental supply is insufficient to meet this increasing demand.


The average home prices in March 2023 

In March 2023, TRREB reported that the average home price in the area increased to $1,108,606, up from $1,096,519 the month before. Despite this increase, the average price was still down nearly 15% from $1,298,666 in March 2022. Home sales in March totaled 6,896, up from 4,765 in February but down nearly 37% from 10,862 in March 2020. New listings in March 2023 also decreased by 44% compared to the previous March, with 11,184 new listings.


Detached homes had an average price of $1,468,651, down 13.5% from a year ago, while semi-detached properties dropped more than 17% to $1,087,924. Townhouses cost an average of $935,626, a 14% decrease, while condos and apartments fell 13% to $703,566. The composite benchmark price for March was $1,118,500, a 16.2% drop on a year-over-year basis, but up month-over-month on both actual and seasonally adjusted bases.


Property Types and Average Prices in March 2023


Let’s explore the factors influencing the Toronto real estate market and the implications for potential homebuyers.


  • Market dynamics

In March, the average home price in Toronto reached $1,108,606, a slight increase from the previous month's $1,096,519. Despite this, the average price remains almost 15% lower than last year's peak of $1,298,666. The recent uptick in competition suggests that buyers are eager to take advantage of the lower prices while they last.


  • Impact of interest and mortgage rates

One of the factors that slowed down the market in the past few months was the rise in interest and mortgage rates. However, the current numbers indicate that prospective homebuyers are undeterred by the higher borrowing costs and are increasingly entering the market. 


  • Sales and new listings

TRREB reported 6,896 sales in March, an increase from February's 4,765 but still down almost 37% from March 2020. One factor impacting sales is the number of new listings, as many potential sellers are holding off on selling their properties, hoping for higher prices like those seen at last year's peak. This cautious approach has led to a 44% decrease in new listings compared to the previous March.


Looking ahead: what to expect in April 2023? 

The Toronto real estate market has shown signs of recovery and stabilization in March 2023, with increasing buyer competition, month-over-month improvements in sales, and a slight uptick in average home prices. Despite year-over-year declines, these trends suggest a more promising outlook for the spring homebuying season in the Greater Toronto Area. The market resurgence is primarily driven by first-time buyers, fueled by high rents and population growth through immigration. However, the current rental supply is insufficient, necessitating policy changes to encourage the development of purpose-built rental units.


Market dynamics reveal that the average home price in Toronto has experienced a slight increase compared to the previous month, with buyers taking advantage of lower prices. While interest and mortgage rates have risen, they do not seem to be deterring prospective homebuyers. Average prices across all property types have decreased compared to last year, with detached homes, semi-detached properties, townhouses, and condos all experiencing declines. Sales and new listings have also seen fluctuations, with the number of sales increasing month-over-month but remaining lower than the previous year, and new listings experiencing a significant drop.


Looking ahead to April 2023, the Toronto real estate market is expected to continue tightening and improving, with homebuyer confidence returning despite rising borrowing costs and interest rates. Sales activity is anticipated to increase, and some economists forecast quarterly sales gains with stronger growth in the second half of the year.


Posted by Maryann Jones on


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