September 2023 Newsletter

From the Toronto Regional Real Estate Board:

Greater Toronto Area (GTA) home sales, new listings and home prices were up in July 2023 in comparison to July 2022. On a seasonally adjusted basis, the market experienced more balance in July compared to June, with sales trending lower while new listings were up.

“Home sales continued to be above last year’s levels in July, which suggests that many households have adjusted to higher borrowing costs. With that being said, it does appear that the sales momentum that we experienced earlier in the spring has stalled somewhat since the Bank of Canada restarted its rate tightening cycle in June. Compounding the impact of higher rates has been the persistent lack of listings for people to purchase compared to previous years,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.

GTA REALTORS® reported 5,250 sales through TRREB’s MLS® System in July 2023, representing a 7.8 per cent increase compared to July 2022. Over the same period, new listings were also up, but by a greater annual rate of 11.5 per cent. The MLS® Home Price Index Composite benchmark was up by 1.3 per cent year-over-year. The average selling price was also up by 4.2 per cent to $1,118,374 over the same timeframe.

On a seasonally adjusted monthly basis, the number of sales trended lower for the second straight month, whereas new listings trended upward. The seasonally adjusted average selling price edged lower while the MLS® HPI Composite benchmark edged higher.

Analysis: What this means for York Region’s home sellers and buyers.

July is historically a slower month for real estate, and this year was no exception. The holiday mindset means there were fewer listings, and consequently fewer sales.

A dampening factor is the uncertainty about future interest rate hikes. Detached home sales have been disproportionately affected by increasing mortgage rates since homeowners in this category carry heavier debt loads. As monthly carrying costs rise, the decision to move up to a larger home has been delayed for many potential sellers. With fewer detached homes for sale, the demand continues to outstrip supply so prices have remained stable.

Another possible consequence of rising interest rates is that the less expensive property categories, namely townhouses and condo apartments, have greater than expected demand and higher prices. Detached homes are simply out of reach for many buyers.