Nobody is buying Toronto homes anymore as demand drops to lowest level in years

The Greater Toronto Area (GTA) housing market experienced a tough year in 2022, as the number of new home sales declined to its lowest level since 2018 on the back of successive interest rate hikes from the Bank of Canada.

The Building Industry and Land Development Association (BILD) revealed on Tuesday morning that just 25,400 new homes were sold in the GTA last year, representing a 29% dip below the 10-year average for sales numbers.

Figures sourced by BILD from Altus Group show a decline in sales of condominium apartments, including units in low, medium and high-rise buildings, stacked townhouses and loft units across the region last year. The 20,917 units sold in 2022 stand at 12% below the 10-year average.

Declines were even more pronounced in the single-family home market, which accounted for just 4,483 new home sales last year, a staggering 64% lower than the 10-year average.

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Edward Jegg, research manager with Altus Group, points out that “GTA new home sales started strongly in 2022 before easing in the second half of the year with annual sales sitting at a 4-year low,” but notes that “prices steadied in December after months of declines as buyer demand and builder supply were more closely aligned.”

Prices may have steadied in December, but the month saw only 563 new home sales across the entire region for the second-lowest level measured in a December since 2008. The majority of these units were condos, at 398 units, though this also marked the second-lowest sales figure for condos in December since 2008.

Home prices have been on a downward trend in recent months, but December actually saw month-over-month increases in the benchmark price for new condominium apartments and new single-family homes.

Following a five-month slide, the benchmark price for new condo units in the GTA climbed to $1,131,614, though that still marks a 2.8% dip measured year-over-year.

Single-family home benchmark prices similarly declined for four consecutive months before rising month-over-month in December to $1,753,356, which is still 4.2% lower than it was the previous December.

Experts say Ontario’s wild housing market could soon finally bottom out https://t.co/MljCY7P081 #Ontario #RealEstate

— blogTO (@blogTO) January 20, 2023

Inventory of new homes slid in December to 13,320 units, though BILD stresses that month-over-month decreases are fairly typical in the final month of the year. What is concerning to experts, though, is a continued lack of inventory.

BILD states that the 6.6 months of single-family and 4.6 months of condo inventory are well short of the nine to 12 months of inventory they’d expect from a balanced housing market.

BILD President and CEO Dave Wilkes points to “continued high interest rates and tightening monetary policy,” which have forced would-be buyers to pull away from the market.

Wilkes puts the burden on the federal government, asking the feds to “reconsider its approach to monetary policy so families can purchase the homes they need without artificial obstacles.”