28 December 2022 ~ 0 Comments

Real Estate Market Watch

This past years summary of what’s been happening in Toronto’s real estate market, consists of both never before seen highs, and lows that have been absent from our market in a very long time. 

We experienced a record high average sales price for detached homes back in February 2022 at a whopping $2,073,989! This was in the Toronto proper area and the average currently sits at $ 1,560,548 and  is to be updated during the first week of January. Peak through today, this equates to a decrease in the range of approximately 25%.

Semi-detached homes peaked in March 2022 at $1,545,447 and currently sit at $1,187,016 which is approximately 23% less than it’s peak values.

Average sale price figures can be misleading in that depending on the particular month of solds, if higher priced homes were more prevalent, it would raise the average, or vice versa. The H.P.I. known as the Home Price Index does a better job of omitting certain traits but its complexity makes it equally confusing for those outside the industry.

I like to stick to average prices for a general sense of what is happening throughout the city. Neighbourhood and property types and specifics (size, condition, location etc) when factored in highlight average decreases that are not as drastic. Roughly I would ballpark the figures being closer to 15% year-to-date, and I expect that to rise over the coming few months. 

Interest rates play a huge part in overall affordability and with current house values across Toronto still hovering above pre-pandemic values, something has to give. And for now, I don’t think it’s interest rates in any meaningful way. 

Long term (2+ years out) predictions are that house values will rise and possibly even surpass the peak values of 2022. That’s a long time off, and until inflation is back down to a reasonable rate, we can expect rates to stay put.

I’m not sure an inflation target of 2% is reasonable anymore and maybe the new norm is 3%-3.5%? The Bank of Canada has done a good job in showing us how tricky it can be, and that even they don’t seem to know for certain. For now my advice would be to proceed with caution when relying on anything the B.O.C. has to say and continue to do what’s best for you. 

We all know that Canada needs to grow in population size in order to support our economy over the coming years ahead. People need places to live. Whether is be renting or owning, housing is needed for the future. When rates start to decrease I wouldn’t be surprised if we see prices escalate once again, and who knows, maybe the predictions of a new value range possibly coming in 2025 will come true?

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