The fall market is off to a calm start as home supply builds giving buyers more choices and less competition. The uncertainty around the Bank of Canada’s next October 25 interest rate announcement is also creating some hesitancy for Toronto buyers, resulting in fewer homes sold last month.
According to the Toronto Regional Real Estate Board (TRREB), total home sales for the region in September 2023 were down by 12.3% from August, and down by 7.1% from last year. Despite demand decreasing, home prices are still holding strong. The average home price for September 2023 is $1,119,428 – a 3.4% increase from August and a 3% increase from September 2022.
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“GTA home selling prices remain above the trough experienced early in the first quarter of 2023. However, we did experience more balanced market in the summer and early fall, with listings increasing noticeably relative to sales. This suggests that some buyers may benefit from more negotiating power, at least in the short term. This could help offset the impact of high borrowing costs,” said TRREB Chief Market Analyst Jason Mercer.
Condo Apartments the Outlier as Demand Slips Across Property Types
Every property type experienced a year-over-year and month-over-month drop in sales, but semi-detached properties experienced the largest decrease in year-over-year sales at 19.4%. Townhouse sales and detached sales were also down pretty significantly compared to last year, decreasing by 10.2% and 7% respectively. The average price for all three property types increased month-over-month and year-over-year, with semi-detached up the most at 6.9% year-over-year.
Condo apartments were the only property type to not experience a year-over-year increase in price as the average price dropped by 3.3% from $730,818 to $707,065. Condo apartment sales dropped only slightly year-over-year by 0.2%, indicating that demand for condos is still high, especially as affordability remains a key concern for buyers.
Months of Inventory Up in Almost Every Region
Thanks to a slowdown in market activity, it seems that the lack of supply issue that has plagued the Toronto Region for much of 2023 is finally stabilizing. Compared with August 2023, months of inventory increased in every region except Durham Region, where months of inventory remained unchanged at 1.5 months.
Year over year the difference in inventory is even more dramatic. In September 2022, Halton and Peel Region both had just 1.3 months of inventory, but in September 2023 Halton Region has increased to 2.1 months, while Peel Region has increased to 2.3 months. Similarly, the City of Toronto had just 1.6 months in September 2022 but now has 2.5 months.
Active listings have also surged across property types, with semi-detached properties experiencing the largest month-over-month increase at 30.1% and townhouse properties experiencing the largest year-over-year increase at 79.1%. Detached properties fared well too, with active detached listings in the region increasing month-over-month by 22.5% and year-over-year by 35.4%.
This means that motivated buyers who have locked in a pre-approval may find that market conditions are finally favouring them, with more supply to choose from and prices softening or remaining flat for some key property types. For example, Mississauga buyers who have had their eye on a detached property may benefit from the 7.94% month-over-month decrease in average price and the 40.63% improvement in new listings.
If you’re on the fence about buying or selling in today’s unpredictable market, give us a call! Our real estate agents can answer your questions on mortgage rates, affordable cities, and market conditions in your local market.
