GTA Real Estate Market March 2023
GTA Real Estate Market March 2023 Summary
As per the March 2023 TRREB Market Watch Report, the GTA housing market conditions tightened in March 2023. Competition between buyers was on the rise and the average sale price was above the average list price for the first time since May 2022.
This trend is expected to grow especially with the influx of record numbers of newcomers to Canada, lifting off of the foreign home buying ban, as well as the First Home Buying Incentives being offered by the Government. Safe to project that first-time home buyers will lead this recovery, as the high average rents are moving up more closely in line with the cost of home ownership.
However, there will always be a shortage of homes for sale in the resale market, hence purpose-built new homes and condos must come up fast for sale as well as rentals.
TRREB reported 6,896 sales in March 2023, which is down 36.5% compared to March 2022. Sales were up and new listings were down resulting in tighter market conditions compared to last year.
While the average selling price was up month over-month basis, the average selling price was down by 14.6% year-over-year to $1,108,606.
|Average Home Prices by City March 2023|
|City of Toronto||$1,708K||$1,262K||$841K||$732K|
|GTA Monthly Statistics as per TRREB Reports|
|Home Sales||Avg. Price|
Economic Outlook impacting Real Estate
As per RBC economists, Canadian economy is expected to hit a cyclical bottom or a mild recession by the middle of the year. But also expected to pick back up starting in 2024.
Home affordability is a big issue facing Canadians. While home prices have come down, the decline is partial, as in most cases the decline is offset by the high borrowing costs, as also reported in our Spring 2023 Real Estate Market Outlook.
While we are not expecting any cuts to the interest rates this year, we could see some cuts in 2024 depending upon inflation. Inflation has come down from 8% (Jun 22) to just over 5% (Feb 23) and the target was to bring it down to 2% by the end of the year.
The Bank of Canada is forecasting that inflation will be 3% by mid-2023 and return to 2% next year.
As of today (April 12, 2023) Bank of Canada is holding interest rate steady as it forecasts inflation to slow to 3% this year. Interest rate is being held steady at 4.5% after being raised eight times between March 2022 and February of this year.
The bank has left the door open to more rate hikes if necessary, but also feels that the rate changes so far are having their desired effect, slowing the economy down enough to bring down inflation.
How does this work is the question on everyone’s mind, and when will it end. For frustrated Canadians (and rightfully so), rents are going up, groceries & gasoline are more expensive, borrowing costs are through the roof.
Basically, the idea behind increasing interest rates is to slow spending. This makes anything you buy on credit more expensive. So you you pull back and that helps balance the economy and that will relieve those price pressures, and lower inflation.
The real estate market has been recalibrating to the interest rate hikes which has put a downward pressure on prices for the short term, but has also kept many hopeful buyers away from entering the real estate market. But we can definitely anticipate prices to pick back up in 2024.
As the economy recovers, housing market is expected to recover too, especially with the record immigration growth. 2022 saw the strongest population growth in Canada. Fundamental demand for housing and affordable housing will continue to grow.
Some whistleblowers argue that the true causes of this inflation include: supply chains, energy price shocks, and the housing crisis in most parts of Canada.
Planning to Sell, Buy or Invest?
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