February sales in the Greater Toronto Area (GTA) were down substantially from the pre-rate hike levels of early 2022, according to the Toronto Regional Real Estate Board. However, the number of new listings also dropped substantially year-over-year. The result was that the average selling price and MLS® HPI continued to level off after trending lower through the spring and summer of last year.
“It has been almost a year since the Bank of Canada started raising interest rates. Home prices have dropped over the last year from the record peak in February 2022, mitigating the impact of higher borrowing costs. Many homebuyers have also decided to purchase a lower-priced home to help offset higher borrowing costs. The share of home purchases below one million dollars is up substantially compared to this time last year,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.
GTA REALTORS® reported 4,783 sales through TRREB’s MLS® System in February 2023 – down 47% compared to February 2022, the last full month before the onset of interest rate hikes. The number of new listings was down by a similar annual rate of 40.9% to 8,367.
“New listings continued to drop year-over-year in the GTA. Recently released Ipsos polling suggests buying intentions have picked up for 2023. This increased demand will run up against a constrained supply of listings and lead to increased competition between buyers. This will eventually lead to renewed price growth in many segments of the market, especially those catering to first-time buyers facing increased rental costs,” said TRREB Chief Market Analyst Jason Mercer.
The average selling price for February 2023 was $1,095,617 – down 17.9% compared to February 2022. Some of this decline is attributable to the fact that the share of sales below $1,000,000 was 57% in February 2023 versus only 38% a year earlier. On a monthly basis, the average price followed the regular seasonal trend, increasing relative to January 2023. The MLS® Home Price Index (HPI) Composite Benchmark was down year-over-year by a similar annual rate of 17.7% but was also up monthly.
“As we move toward a June mayoral by-election in Toronto, housing supply will once again be front and center in the policy debate. New and innovative solutions, including the City of Toronto’s initiative to allow duplexes, triplexes, and fourplexes in all neighborhoods citywide, need to come to fruition if we are to achieve an adequate and diverse housing supply that will support record population growth in the years to come,” said TRREB Chief Executive Officer John DiMichele.
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