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 4% lower than 2022 averages.
- You might also like:
- This is what Toronto's skyline could look like in the not-too-distant future
- Toronto mall will be completely demolished for new towers and public parks (RENDERINGS)
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% 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.”