Real Estate in the Moment
Increased activity in the Toronto housing market in September went a long way toward stabilizing home prices and drove the first price increase since February 2022. The average sale price for a home in the Greater Toronto Area (GTA) rose to $1,079,500 - up 0.4 percent from the previous month, and up 1 percent compared to February of last year.
That said, average home prices remain 19% below the peak reached in February 2022. This is largely due to higher interest rates and the increased cost of borrowing.
The unexpected month-over-month price increase was also accompanied by a rise in sales activity compared to the previous month. Home sales in the GTA rose 15% from the prior month, with 5,627 homes sold in August 2022. Although sales volumes are still down nearly 34% year-over-year, this surge in sales activity marks the first month-over-month increase in sales since March of this year.
The rise in sales came alongside a modest drop in new listings. The number of new listings fell to 10,537, down 13% from the previous month and down 1% year-over-year. As a result, Toronto's sales-to-new-listings ratio (SNLR) climbed to 53%, up from last month's SNLR of 41%, though still below last year's SNLR of 81%.
In its August 2022 market report, the Toronto Regional Real Estate Board (TRREB) suggested that a higher sales-to-new-listings ratio could help support home prices in Toronto as the housing market heads into the busy fall season. It remains to be seen whether this month was an exception or whether sales activity will continue to climb. By every objective measure, demand for housing still significantly outstrips what's available on the market. The main driver behind the price correction and modest pullback in demand has been the Canadian government's announced fight against inflation, and the resulting near-doubling of the bank rate used to finance home purchases.
Overall, the current situation can be described as fairly stable and predictable. If the Bank of Canada holds off on any further rate increases, home prices should begin to gradually move upward later this year. If rates do rise again in the near term, however, the market will likely continue treading water into roughly the spring of 2023. This may well be the ideal moment for those looking to buy: prices have already come down, while the next upswing is only just beginning to show itself. And sellers have a small advantage of their own as well: the number of listings sits at a historic low, competition is practically nonexistent, and with the right marketing approach, your home should sell quickly and at the best price the current market has to offer.