The Greater Toronto Area (GTA) housing market was similar in January 2023 as December 2022 in terms of number of sales and average selling price. However, both sales and prices were down compared to January 2022, reflecting the impact of higher borrowing costs.
The Toronto Regional Real Estate Board (TRREB) reported 3,100 sales through its MLS system in January 2023, a decrease of 44.6% from January 2022. The average selling price for January 2023 was $1,038,668, a decrease of 16.4% from January 2022. The MLS Home Price Index (HPI) Composite Benchmark was also down by 14.2% compared to January 2022. The trend of short-term borrowing costs increasing and medium-term mortgage rates trending lower is expected to continue, helping with affordability in the future.
The Greater Toronto Area (GTA) housing market in January 2023 saw 3,100 sales and a slightly lower average selling price of $1,038,668 compared to December 2022. Year-over-year, both sales and prices were down due to the impact of higher borrowing costs on affordability.
The Toronto Regional Real Estate Board (TRREB) Chief Market Analyst predict that the market will see some improvement in the coming months due to the Bank of Canada’s announcement to keep interest rate hikes on hold, record population growth, and tight labor market conditions. Despite a decline in home prices over the past year, the expectation is that they will continue to trend lower due to the declining medium-term mortgage rates. The government has also announced policies to improve housing affordability in the long term, including the increase of housing supply in the ownership and rental markets.
Residential Stats
The total residential transactions in the area have decreased by 44.6% compared to last year and 1% compared to the previous month. The average selling price for residential properties has also decreased by 16.4% YoY and 3% compared to the previous month. The total number of new residential listings has decreased by 3.7% YoY. The sales-to-new listings ratio has decreased by 30% compared to last year. The property days on market have increased by 127.8% compared to last year, and the listing days on market have increased by 123.1% YoY.
Commercial Stats
The total square footage of industrial, commercial/retail, and office space leased through TorontoMLS has decreased by 12.7% compared to last year. Total sales of industrial, commercial/retail, and office space has decreased by 42.3% compared to last year. The average industrial lease rate has increased by 20.3%, the average commercial/retail lease rate has increased by 32.4%, and the average office lease rate has increased by 17.5% compared to last year.
Condo Market Report
The average selling price of condominium apartments in Toronto remained unchanged in the fourth quarter of 2022 compared to the same period in 2021. Despite a downward trend in the overall housing market, condo prices were sustained due to a relative balance in supply and demand. Condos are the most affordable housing segment and the average selling price in Q4 2022 was $710,520.
Total condo sales were down by 54.1% compared to Q4 2021, but new listings were also down by 14.3%. The condo market is an important entry point for first-time buyers and an important source of rental supply. With continued immigration, demand for condos in both the ownership and rental markets is expected to strengthen in the future.
Condominium Sales Stats
The total sales of condo apartments in Toronto have decreased by 54.1% compared to last year, with no change in the average selling price. There has also been a 14.3% decrease in total new listings, a 41% decrease in the sales-to-new listings ratio, and a 50% increase in the days on market compared to last year.
Condominium Rental Stats
The average industrial lease rate per square foot in Toronto has increased by 20.3% compared to last year, while the average commercial/retail lease rate per square foot has increased by 32.4% and the average office lease rate per square foot has increased by 17.5% compared to last year.
Rental Market Report 2022
The average rent for condominium apartments in Toronto increased in the fourth quarter of 2022, with one-bedroom apartments rising by 19% to $2,503 and two-bedroom apartments rising by 14.1% to $3,178. The number of condominium apartment rentals decreased by 19.9% from the same period a year prior, with the number of rental listings also declining but by a smaller rate of 11.8%.
The increase in rent and decrease in rental transactions was driven by strong population growth, immigration, job creation, and interest rate hikes by the Bank of Canada, and is expected to continue in 2023. However, the tight rental market and strong rent growth is expected to persist due to a shortage of supply, putting upward pressure on rents. To address this, new policies to increase housing supply are needed.
Commercial Realty Watch
The Toronto Regional Real Estate Board (TRREB) Commercial Network reported 5.1 million square feet of leased space in Q3 2022, a 1% decrease compared to the same period in 2021. Average lease rates in the industrial, commercial/retail, and office segments either remained steady or increased year-over-year.
However, commercial sales in Q3 2022 decreased compared to Q3 2021, with fewer sales in the industrial, commercial/retail, and office sectors. The lingering effects of COVID-19-related policies have impacted the commercial real estate industry, causing some differences in year-over-year comparison numbers.
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