The December 2022 Market Watch Report has been released and according to the report, the Greater Toronto Area (GTA) housing market experienced a marked adjustment in 2022 compared to record levels in 2021. Existing affordability issues brought about by a lack of housing supply were exacerbated by sustained interest rate hikes by the Bank of Canada.
"Following a very strong start to the year, home sales trended lower in the spring and summer of 2022, as aggressive Bank of Canada interest rate hikes further hampered housing affordability. With no relief from the Office of the Superintendent of Financial Institutions (OSFI) mortgage stress test or other mortgage lending guidelines including amortization periods, home selling prices are adjusted downward to mitigate the impact of higher mortgage rates. However, home prices started levelling off in the late summer, suggesting the aggressive early market adjustment may be coming to an end," said new TRREB President Paul Baron.
Supply of new listings continues to be an issue which explains why prices seem to be stabilizing in recent months. Lack of supply has also affected the rental market as renting is becoming more popular in this environment of high-interest rates and we have seen double-digit rent increases.
All reports that I am reading, including the Royal Lepage 2023, Quarterly Forecast is predicting that the steep declines in pricing have reached an end and they are predicting more normal trends on the horizon. The median price of a home in Toronto is expected to decline by 2.5% in 2023, while the median price of a condominium is forecast to increase modestly by 1%.
Lack of supply is still a challenge and if you are thinking of selling then please keep in mind that the spring market starts early and we have already seen an uptick in listings in York Region. If you think you might be selling in the next 6 months then please don't hesitate to contact us for a current market evaluation of your home and to talk about a strategic marketing plan.
Jill Renshaw, Broker