Happy New Year to all of you. Wishing you health, happiness and success in 2024. As we look back at 2023, the real estate trends kept us on our toes. As a Toronto real estate agent, I can say firsthand that there were a lot of growing pains for buyers, sellers, investors and agents this past year. Let’s take a look back at the Toronto Real Estate Wrap-Up for 2023!
Toronto Real Estate Sets New Record
The Toronto Regional Real Estate Board set a new record in 2023 and it’s not one that Toronto real estate agents are excited about. TRREB recorded the lowest sales volume per agent in the history of buying and selling. We cannot attribute this to one particular event. If you are a regular reader of the SO&Co. blog, our monthly market updates have followed several reasons for this. For example, rate increases, Canada’s growing population, the cost of supplies and development, and overall inflation are among a few.
Bank of Canada Raises Interest Rates
The Bank of Canada kicked off 2023 holding rates; however, bond rates dropped in March due to a banking crisis. As the warmer weather in May increased so did real estate prices. An average increase of 15% in residential prices caused the Bank of Canada to raise rates in June and July. A fixed-rate mortgage went from 4.7% in April to 6.5% by September. To get an idea of the increase see below. As an example, if you were to take on a $1 million mortgage, with 20% down and a 25-year amortization period, your monthly mortgage payment would go from $4,517 to $5,359. In summary, during this period alone. your monthly payment would have increased by $842.
This increase led buyers to hold off, increasing inventory and opening up more options for buyers. Toronto real estate agents were flooded with requests from renters which resulted in a 20% year-over-year increase in residential rent prices by August 2023. Realtors witnessed multiple bids and over-asking on rental units, which highlighted the ongoing housing need.
The Future of Toronto Real Estate
Above all, one thing that remains clear is that supply will not match the future demand as it continues to grow. This sentiment has been echoed by government initiatives including the push to expedite approvals on new developments, incentives for building preconstruction and even zone changes to increase density and grow residential areas. This is not going to be a problem that is easily solved. As a result, it is predicted that prices will remain consistent until we see any hint of rate relief. Once buyers get a taste of rate relief, we expect to see a surge in both transactions and residential prices.
Average Price of a Home in the GTA By Month
Take a look at the trends over 2023. As you can see below, the peak in prices as of May along with the fall in August and November.
If you would like to get a jump on your real estate goals for 2024, we are here for you. Our team of Toronto Real Estate Agents specializes in buying, selling, investing and more. We pride ourselves on expert advice in pricing expectations, staging, marketing and negotiating. If you would like to schedule a call with one of our agents, click here.
