2023 GTA Real Estate Market Outlook – A Balancing Act
2023 GTA Housing Market Outlook by RE/MAX
The Bigger Canadian Picture
The majority of Canadian housing markets balancing out, with 60% anticipated to be balanced markets in 2023 – a trend that’s already starting to materialize in many regions as a result of current economic conditions.
“It’s good see the majority of markets moving toward more balanced conditions, which is typically defined by 45 to 90 days on market. This is a much-needed adjustment from the unsustainable price increases and demand we saw early in 2022,” says Christopher Alexander, President, RE/MAX Canada.
- Amid rising interest rates, and a looming recession, RE/MAX Canada is anticipating a modest decline of 3.3% in average residential sales prices across the country in 2023.
- The biggest price declines across the country are expected in Ontario and Western Canada, where some markets may see average residential sale prices decrease by 10% to 15%.
- Price growth is anticipated in Atlantic Canadian markets.
The estimates are based on surveys done for RE/MAX’s 2023 Canadian Housing Market Outlook Report.
According to a Leger survey commissioned by RE/MAX as part of the report:
- Canadians view home ownership as the best long-term investment they can make (73%).
- Many are feeling less optimistic in the short-term with 67% inclined to buy in the first half of 2023, and 62% less inclined to sell in that time frame.
“Many Canadians have understandably expressed hesitancy about engaging in the real estate market early in 2023, in the wake of rising interest rates and broader economic uncertainties… however, we’re confident that as economic conditions improve and the market continues to even out into Q3/Q4 2023, a more-regular pace of activity will resume.”
Regional GTA Real Estate Market Outlook
The average residential sale price in the GTA may decrease by up to 11.8% in 2023.
- Overall, GTA is currently a balanced market, which is anticipated to continue into 2023.
- Move-up and move-over buyers have been driving demand in the region, in a trend that is expected to carry on in the next year.
- Single-detached homes remain the dominant housing type, followed by condo apartments.
- The average residential sale price has increased by 11% from $1,086,155 in 2021 (January-December) to $1,203,916 (January-October) in 2022.
Hamilton-Burlington, Oakville, Brampton, Mississauga are expected to see average residential sale prices increase between 2% to 8% in 2023.
2023 is expected to be a mixed bag of opportunities and limitations
- Rising interest rates are expected to be a dominant theme in 2023, resulting in a slower market for both home buyers and home sellers in the GTA.
- However, resulting price adjustments will (a.) reduce number of listings, but (b.) improve home affordability.
- For buyers, this includes having fewer competitors, reduced prices and an increase in choices in the market (albeit limited options).
- Meanwhile, for sellers, with fewer competing listings, while they may have to compromise on price (in some cases), they will be able to trade for moving to other suburbs.
- Currently many first-time buyers are choosing to pause their home-buying efforts, due to a lack of affordability.
- New construction projects are being delayed as a result of the widening gap between market prices and construction costs, including the impact that higher interest rates have had on financing these projects.
- The luxury market in the GTA has slowed down and will likely continue to cool in 2023 due to economic pressures.
- In London, Kitchener-Waterloo, Barrie, the GTA, Durham, and Lakelands West (Georgian Bay area) average residential sale prices are expected to decline by 2% to 15% in 2023.
- Sudbury, Hamilton-Burlington, Oakville, Brampton, Ottawa, Mississauga, Muskoka, Niagara, Windsor, York Region, Haliburton, Peterborough and The Kawarthas, and Kingston are all expected to see average residential sale prices increase between 2% to 8% in 2023.
- 40% of regions in Ontario Canada are considered balanced markets, including London, Kitchener-Waterloo, Oakville, Barrie, Toronto, Windsor, Lakelands West and Kingston.
- Hamilton-Burlington, Brampton, Mississauga and Niagara are all considered buyer’s markets, while Sudbury, Muskoka, Durham York Region, Haliburton, Ottawa and Peterborough and the Kawarthas favour sellers.
Additional Insights
- Although rising interest rates have cooled/stabilized the real estate market, 45% of Canadians are concerned that further increases will impact their ability to engage in the real estate market in 2023.
- 54% of Canadians believe that the two-year ban on foreign investors purchasing property which will come into effect on Jan. 1, will increase the availability of affordable housing for local homebuyers. This is an additional step by the government after the Non Resident Speculation Tax increase. The government has been tabling quite a few proposals to increase housing supply in the coming years. Another example of this is the potential Greenbelt expansion making provision for 50,000 new homes in Ontario.
- 15% of Canadians are considering moving to another province in 2023 to find better housing affordability and liveability.
- 54% of Canadians feel confident that their financial situation will remain steady in 2023.
Content source credit: remax.ca
