The Toronto region real estate market continued its downward trend in December. Sales reported by the Toronto Regional Real Estate Board (TRREB) were down 48% year-over-year, while total yearly sales were down 38.2% compared to the 2021 peak of 121,639. The Bank of Canada’s consistent interest rate increases worsened already-existing affordability problems brought on by a shortage of inventory.
The December average price was down by 9.2% to $1,051,216 compared to the December 2021 average of $1,157,837. Month-over-month, the average selling price decreased by 2.7%.
“Following a very strong start to the year, home sales trended lower in the spring and summer of 2022, as aggressive Bank of Canada interest rate hikes further hampered housing affordability,” said new TRREB President Paul Baron. “However, home prices started levelling off in the late summer, suggesting the aggressive early market adjustment may be coming to an end.” Compared to 2021 when the average selling price was $1,095,333, the 2022 average price increased by 8.6% to $1,189,850.
Buyers Continue to Sit on the Sidelines, Driving Up Listing Days on Market
In 2022, sales were down 48.2% compared to 2021’s record-breaking market, yet there were 169% more active listings! Overall, listing times have more than doubled, experiencing a 110.5% increase in average property days on the market.
As properties sat on the market longer and motivated buyers became scarce, sellers have had to re-list or put their plans to sell on hold. However, Zoocasa CEO and Broker of Record, Lauren Haw, predicts that 2023 will be the year for the sideline buyer: “Sideline buyers have been waiting, and many will have waited long enough and will finally decide to enter the market regardless of where interest rates stand. Homeowners that will hit or exceed the maximum amount they can afford on a monthly and/or yearly basis will add to the demand in housing,” Haw explained in our 2023 market predictions report.
Condo Apartments Average Price Remained Strong in 2022
Throughout the Toronto region, condo apartments saw the smallest dip in average prices this year, yet the largest decline in year-over-year sales numbers. The average price of condo apartments in the 416 and 905 in December was $741,584 and $633,135 respectively, down only 0.9% total year-over-year. Condo apartments were moving quickly in 2021, so although they have still been in high demand this year, sales declined 52.9% year-over-year in the Toronto region.
All other property types also saw a decline in average prices year-over-year throughout the city; townhouses, semi-detached, and detached homes were down 39.5%, 37.8%, and 38.6%, respectively. Single-family homes in Halton were most notably impacted in the GTA this year, with a 14.04% decline in benchmark prices year-over-year, now sitting at $1,424,200.
The real estate market experienced a chain reaction in 2022, set off by rising interest rates impacting affordability, which ultimately led to tightened levels of inventory, longer average property days on market for active homes, and many prospective buyers and sellers that chose to wait it out. So, what can we expect in 2023? Check out our 2023 market predictions to learn more.
