Experts say the Toronto housing market will experience a dramatic shift in 2023
Toronto’s housing market risked degrading from a controlled descent into a tailspin in 2022, but experts are confident that 2023 will bring major changes to the regional real estate situation.
The Toronto Regional Real Estate Board (TRREB) has released a pretty optimistic outlook for the year considering all the doom and gloom forecasts that have made headlines in recent months, predicting an uptick in home sales, prices, and competition among Greater Toronto Area (GTA) home buyers in the second half of the year.
TRREB Chief Market Analyst Jason Mercer suggests that “It will be a year of two halves in 2023.”
“The first half will feel similar to the fall of 2022 due to the lingering effects of higher borrowing costs and related economic uncertainty. However, recent polling by Ipsos suggests buying intentions are edging up.”
That Ipsos data reveals that buyers are expecting to return to the market after a string of successive interest rate hikes from the Bank of Canada sent buyers reeling and quickly cooled market conditions. Mercer expects that trend to reverse in the coming months.
“The second half of 2023 should be characterized by an increase in demand for ownership housing, supported by lower fixed mortgage rates, a relatively resilient labour market, and record immigration,” continued Mercer.
Projections of 70,000 home sales in 2023 would put the year well below the 2022 result, but TRREB expects to see “marked improvement in the second half of the year.”
Average selling prices will bounce back to $1,140,000 across all home types, though overall average prices for 2023 across the board are anticipated to remain four per cent lower than 2022 averages.
Based on Ipsos data showing buying and listing intentions are both on the rise, experts are confident that the market will look very different in the second half of 2023.
TRREB also considered transportation infrastructure research from CANCEA and data from the Pembina Institute on the relationship between electric vehicle trends and real estate in its market outlook.
These sources are crucial as the region braces for a surge of new residents that will add further demand to the regional real estate market, a population increase that will necessitate progressive shifts in how we house and move people.
The combined Greater Golden Horseshoe region is expected to see a 71 per cent population increase by 2051, a boom that TRREB CEO John DiMichele says will come with an increased focus on building sustainable housing and supporting infrastructure.
“This is a wake-up call,” said DiMichele.
“We know there is a better way to build homes and communities,” added DiMichele. “We need a long-term vision with an eye on environmental sustainability from raw materials to green designs that will benefit, not burden, future generations.”
TRREB President Paul Baron stresses that housing alone won’t address population growth, saying that it “must be supported by the appropriate infrastructure.”
“Recent policy initiatives at all levels of government seem to acknowledge this, but it’s time for these policies to actually translate into tangible results,” said Baron.
Openn NA Launches with the Canadian Real Estate Association, Advancing Transparency in Real Estate
IRVINE, Calif. — Openn North America (“Openn”), a property technology company, is excited to announce its official launch in Canada, in partnership with the Canadian Real Estate Association (“CREA”). The partnership brings Openn’s ground-breaking offer management software, which adds transparency and confidence to the offer process, to Canadian homebuyers, sellers and real estate professionals through REALTOR.ca.
“As our first entry into Canada, we are thrilled to launch in partnership with CREA, to help Canadians navigate the challenges of the property transaction process through near real-time data tracking and feedback,” said Duncan Anderson, President of Openn NA. “Now, more than ever, we are seeing the significant impact and disadvantages that blind bidding creates due to lack of transparency throughout the entire bidding process. By partnering with CREA and leveraging their online platform, it marks an exciting step toward a more efficient and equitable real estate landscape.”
Through the partnership, Openn will be available to Realtor.ca users, bringing unparalleled visibility of data to buyers and sellers on participating property listings, while supporting agents in managing the end-to-end transaction process and client communications with greater ease. The platform offers the unique ability for buyers and sellers to track other offers in near real-time, optimizing the entire offer and acceptance process through greater equality and transparency.
The Openn and CREA partnership follows a successful pilot program in 2022 in select Canadian markets.
About The Canadian Real Estate Association:
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry associations. CREA works on behalf of more than 160,000 REALTORS® who contribute to the economic and social well-being of communities across Canada. Together they advocate for property owners, buyers, and sellers, and maintain REALTOR.ca, Canada’s most prominent online property listings platform. According to the Canadian Internet Registration Authority (CIRA), REALTOR.ca is the 6th most visited .ca site and one of Canada’s leading platforms by usage across all categories.
About Openn North America
Openn North America Inc. is a property technology company offering a proprietary cloud-based software platform to support the offer and acceptance process in a real estate transaction with greater transparency. The Openn platform facilitates the negotiation process, featuring streamlined digital contracting and automated communication tools, which enhances a property transaction. The solution can provide buyers with real-time feedback through their device on how much competition exists and where their price stands in the negotiation.
Real estate: Home sales expected to pick up in spring
With two kids under the age of six living in a two-bedroom, one-bathroom household, Jacquelin Forsey and her husband have long known it would only be a matter of time before their family outgrew their beloved home.
Long hours in the small space while Forsey was pregnant and toiling away from home during the COVID-19 pandemic, along with a visit to a neighbour who was selling their “beautiful” place that was “the perfect size,” convinced the couple to start their new home hunt recently.
“If there was any way to make this place bigger, we would never leave,” said Forsey, a PhD student, of the home her family owns in the Leslieville area of Toronto.
“We love it. We love the neighbourhood, we love our house, but we just can’t all be in this tiny house forever.”
The couple has spent recent months scouring listings and put in at least one failed bid, but Forsey has her fingers crossed that their fortunes will change this spring as economists and brokers predict activity to return to Canada’s housing market.
The market has been sluggish since last year, when prospective buyers started putting off plans to purchase homes as the Bank of Canada aggressively hiked interest rates eight consecutive times.
The quick succession of increases eroded buying power as borrowing costs rose and sent prices falling, discouraging sellers from listing their homes.
With Canadian Real Estate Association data showing average prices have dropped 19 per cent from their February 2022 peak of $816,578 to $662,437 last month and BMO Capital Markets’ chief economist predicting they will bottom out after falling 20 to 25 per cent, realtors see many edging toward a purchase once more.
“We got a flood of buyers in January, in February and we still are getting more and more and we started seeing multiple offers return and bully offers return,” said Michelle Gilbert, a Toronto broker with Sage Real Estate Ltd.
“We’ve started getting calls where buyers are just like ‘I think I’ll just adjust what I want, but I don’t want to miss my opportunity.”
These clients are a mix of people who have to move because they are relocating for work or growing their families and also first-time homebuyers keen to not let lower prices pass them by.
Many first-time buyers are finding it harder to qualify for mortgages, but still want to make a purchase, so they are compensating by adjusting their expectations, said Gilbert.
“Maybe they can’t get the square footage they thought they could get because they can’t qualify for as much but they still really want to get a good deal,” she said.
Over in Vancouver, Coldwell Banker Prestige Realty agent Tirajeh Mazaheri has also seen a resurgence in buyers.
Weeks after the Bank of Canada signalled further interest rate hikes were unlikely, she said properties started selling quickly and with multiple offers.
She spotted a condo listed for $699,000 garner 11 offers and a house listed for $2.8 million snag five bids last month.
Others aren’t wading into the market just yet but are preparing to do so soon.
“Everyone who wasn’t pre-approved is getting themselves pre-approved because people want to jump on buying something because they’re worried that prices are going to start going way too high again,” said Mazaheri.
Despite such sentiment, she doesn’t see the market returning to the frenzied pace of 2021, largely because of the lack of properties available.
February’s new listings totalled 51,366, down 26 per cent from a year ago, the Canadian Real Estate Association recently revealed. On a seasonally-adjusted basis, they hit 57,535, down nearly eight per cent from January.
If a sharp drop in new listings continues along with tightening demand-supply conditions, a moderation in prices will materialize over the coming months, RBC Economics’ assistant chief economist Robert Hogue said in a recent report.
If those conditions are sustained, he forecasts prices will bottom sometime in the summer or shortly thereafter.
Sellers will be watching what direction prices move in closely.
“A lot of sellers are beginning to want to list, but most of them, I am noticing, are a little bit cautious,” Mazaheri said.
“They’re noticing the shift in the market as well and they want to get top dollar for their property, so they’re thinking maybe let’s wait until the spring or the summer.”
For Forsey, there is no rush to buy a home, but she admits the pause on interest rates is giving her family some confidence in its decision to look for a new place.
While her engineer husband has been crafting spreadsheets calculating what they can afford, their amortization and the effects of potential interest rates, she said they’ve accepted “that we can’t time the market and we just have to do the best we can do and what we’re comfortable with and then hope it works out.”
“We can stay here until the right opportunity comes and we don’t have to rush out and we don’t have to make a rash decision,” she said.
“And if it doesn’t work out for a long time for us, that’s OK because what we’ve got is pretty great.”
This report by The Canadian Press was first published March 22, 2023.
Home sales in Lethbridge see a significant drop: report
The Alberta Real Estate Association has published its data from several cities across the province.
And its report on Lethbridge shows home sales fell over the past year.
But Ann-Marie Lurie, chief economist at for the Alberta Real Estate Association, says the data isn’t very alarming.
“What we’re really seeing is a return to something a little bit more normal. We have to keep in mind over the last couple of years sales have been exceptionally strong and far stronger than what we traditionally see in our market because of the low interest rate environment,” Lurie said.
Year-over-year home sales in Lethbridge dropped 37.8 per cent to 107 units sold.
New listings followed a similar trend, dropping 33.6 per cent to 140.
Inventory of available properties jumped 13.9 per cent to 402, but that’s still about 30 per cent short of long-term trends.
“I think it’s a combination of quite a few different things,” said Jennifer Brodoway, Team View Lethbridge Realtor.
“The last couple years have been a little bit crazy and a lot of people got moving and that’s slowed down a little bit.”
New home builds have also experienced a decline, down 251 housing starts year to date.
“We can see that inventory is up over last year, we can see that sales are down and not surprisingly, we can see that housing sales are also down. They’re all correlated and work together,” said Bridget Mearns, executive officer of BILD Lethbridge.
Despite the slowdown in home sales, Lethbridge experts are still feeling optimistic about the market.
Cathy Maxwell, CEO of Lethbridge and District Association of Realtors, points to Lethbridge’s diversified economy and the flat interest rate after it had been raised several times this year as reasons to be hopeful for the future.
“In talking to realtors out in the field, they’re busy. And you know, the other thing we have to consider is that Lethbridge is a very strong and diversified city. And I know that we say that all the time but it’s so true,” Maxwell said.
Home prices in Lethbridge have seen a slight increase.
The total residential average price increased 1.1 per cent year over year to $351,783.
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