GTA Real Estate Market May 2023
GTA Real Estate Market May 2023 Summary
As per the May 2023 TRREB Market Watch Report, the GTA housing market continued to improve from a sales perspective in May 2023. Unfortunately, the supply of homes for sale did not keep up with the demand for ownership housing.
Sales as a share of new listings were up dramatically compared to a year ago.
The availability of housing remains scarce, resulting in a limited range of choices for individuals interested in entering the real estate market. With inventory levels being so low, competition among potential buyers becomes intense.
There were 9,012 home sales in May 2023, which is a 24.7% increase compared to May 2022. New listings were down by 18.7% over the same period.
“The supply of listings hasn’t kept up with sales, so we have seen upward pressure on selling prices during the spring,” as per TRREB Chief Market Analyst.
Competition between buyers increased substantially compared to last year, resulting in the average selling price reaching almost $1.2 million last month. “If we don’t quickly see housing supply catch up to population growth, the economic development of our region will be hampered as people and businesses look elsewhere to live and invest,” as per TRREB President.
The average selling price of $1,196,101, represented a 1.2% decline compared to May 2022.
Lack of Supply & Affordability Issues
The majority of Canadians agree that there is a widespread problem with the affordability of housing across the country. Despite the numerous suggestions put forward during the federal election campaign and ongoing presentations by public policymakers, experts in the industry concur that the most effective resolution lies in increasing the availability of housing.
As reported by the Canada Mortgage and Housing Corporation (CMHC), there was a slight increase of approximately 1.2% in housing starts, reaching 7,122 units in February compared to the previous year. When looking at the annualized data, new housing construction activity has surged by over 11%, totaling 12,008 units.
This can be achieved by simplifying the application process, reducing bureaucratic hurdles, and encouraging more construction. Until these measures are successfully implemented, it will remain difficult for numerous young purchasers to enter the GTA real estate market.
GTA Real Estate Market May 2023 Stats
|Average Home Prices by City May 2023|
|Detached ||Semi |
|City of Toronto||$1,913K||$1,398K||$928K||$784K|
|GTA Monthly Statistics as per TRREB Reports|
Average Listing Days on Market (Avg. LDOM) refers to the average number of days sold listings were on the market. Average Property Days on Market (Avg. PDOM) refers to the average number of days a property was on the market before selling, irrespective of whether the property was listed more than once by the same combination of seller and brokerage during the original listing contract period.
GTA Real Estate Market May 2023 Market Notes
0.25% Interest Rate Increase
Bank of Canada’s overnight rate is back on the increase mode.
The Bank raised its key rate to 4.75%, marking the first increase since January and the highest rate since April 2001.
Why the upswing?
The Bank cited stronger-then-expected economic activity as the reason for its decision, driven by consumer demand and consumption.
Inflation is expected to come down to 3% this summer, well below its high point of 8.1% reached last June, but it still sits above the bank’s 2% target.
What does this mean for Home Buyers & Sellers?
The .25% rate increase is not expected to slow the home price recovery in the GTA.
Experts are saying that the Bank of Canada’s quarter point rate hike will clearly hurt variable rate borrowers and those renewing mortgages, but lack of listings will continue to boost GTA house prices.
Bank of Canada’s 2023 Interest Rate Announcements
Bank of Canada announces its decision for the overnight rate target eight times a year, typically on a Wednesday. The schedule for 2023 is as follows:
- Wednesday, January 25
- Wednesday, March 8
- Wednesday, April 12
- Wednesday, June 7
- Wednesday, July 12
- Wednesday, September 6
- Wednesday, October 25
- Wednesday, December 6
Read the full interest rate announcement.
Buyer Seller Sentiments
Amidst the fluctuating economic environment, Canadian homebuyers and sellers started the year with optimism that 2023 could yield a more-balanced market, according to RE/MAX Canada’s 2023 Industry Trends Report.
GTA real estate market has been feeling the impact of the rising cost of living, increased demand from a growing population, unemployment status, the mortgage stress test. Rental prices have also been hitting new highs.
When it comes to immigration, Canada is welcoming record numbers of immigrants. This added demand is bound to drive up both residential sale and rental prices unless more housing inventory is added to the market.
- Location remains a key driver of demand in the GTA (access to transportation, green space, walkability, access to restaurants/shopping etc.)
- Interest rates rising have provided a much-needed price adjustment in the GTA that has allowed many move-up and investment buyers to benefit, particularly those that are making a move from city cores to surrounding areas.
Tips for Buyers:
- Fewer competition does not mean a lower deposit, a strong certified deposit continues to be extremely important to demonstrate the strength of a homebuyer’s offer and their financial ability to close the deal.
- Homes in most market areas of the GTA that are priced correctly, will continue to generate multiple offers, highlighting the importance of getting a mortgage commitment and inspection done in advance of the offer.
Tips for Sellers:
- As a seller, it is important to focus on the difference in value between the property being sold and one being purchased. There are great opportunities to “move-up” when making a switch (moving from a condo in Downtown Toronto to a single family home in Hamilton)
- Staging homes continues to be a best practice with significant impact across all markets.
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