01/06/2023
Happy New Year, I hope you have been able to spend some quality time with friends and family over the holiday break. The Toronto Regional Real Estate Board released its final numbers for the year this week and there is a lot of interesting information. Following a very strong start to the year, home sales trended lower starting in the spring and continued throughout the balance of 2022 as aggressive Bank of Canada interest rate hikes hampered housing affordability, putting downward pressure on prices to mitigate the impact of the higher mortgage rates.
There were 75,140 sales reported through TRREB's MLS System in 2022 down 38.2% compared to the 2021 record of 121,639. The average selling price for 2022 was $1,189,850 up 8.6% compared to $1,095,333 in 2021. This price growth was due to a strong start to the year.
As we compare December 2022 with December of last year the adjustments in our market have become more evident. Sales volume is down just over 48% with active listings up 169%. With sales down and the supply of available homes up, downward pressure on pricing has begun to set in. Prices are down 9.2% this past December compared to December 2021.
With the jump in supply of all available home types the Months of Inventory number still remains in sellerโs market territory. The supply of available homes for sale is still considered low which is assisting in the easing of prices; hence we are not seeing substantial price declines.
Condominium pricing remains flat even with the volume of sales down over 50%. Condominiums still remain an affordable way to enter the residential real estate market, with borrowing rates on the rise and the average price of freehold properties slowly moderating, condos remain in demand amongst first time buyers and investors.
New Home Construction wrapped up the year with less product entering the market and with a lower volume of sales. Investors continued to sit on the side lines and are waiting for borrowing costs to show some consistency before jumping into the market. Construction costs still remain expensive and with the cost of borrowing going up developers are unable to make any substantial adjustments to their pricing models. However, developers have come up with some interesting promotions to attract purchasers, from cash back on closing to rental guarantees, developers are finding ways to sell units and keep buyers interested.
With inflation rates still running high we are anticipating another rate increase from Bank of Canada this January. Until we see some consistency in interest rates the inventory of available homes for sale will continue to rise, further moderating prices and giving buyers more choice. 2023 is going to be an interesting year for real estate. Anytime there is a change in the market opportunities present themselves, I am always happy to discuss what those opportunities might look like for you.
I wish you and family a very successful 2023, please never hesitate to reach out with your real estate questions, I am here to help.
