Average Toronto home prices just dropped by the steepest rate on record
Average Toronto home prices continue to fall on a year-over-year basis, dropping a record-breaking 17.9 per cent between February of 2022 and February of 2023, per newly-released market data.
Homes that were going for an average of $1,334,062 across the GTA last year at this time are now selling for an average price of $1,095,617, marking the steepest price decline ever recorded (or at least since realtors started keeping track of this metric in 1988.)
"It has been almost a year since the Bank of Canada started raising interest rates," said Toronto Regional Real Estate Board (TRREB) President Paul Baron when releasing the board's figures from February on Friday.
"Home prices have dropped over the last year from the record peak in February 2022, mitigating the impact of higher borrowing costs. Many homebuyers have also decided to purchase a lower priced home to help offset higher borrowing costs."
Baron also noted that the share of home purchases below one the one million dollar mark "is up substantially compared to this time last year," which makes sense after a series of aggressive Bank of Canada interest rate hikes that have prohibited many first-time buyers from obtaining seven-figure mortgages.
But, while the share of below-million-dollar homes sold was lower than usual, so too was the overall number of homes sold in the Greater Toronto Area.
"February sales in the Greater Toronto Area were down substantially from the pre-rate hike levels of early 2022," reports TRREB, which marked only 4,783 sales last month — 47 per cent less than were sold in February of 2022.
"The number of new listings entered into the system was down by a similar annual rate of 40.9 per cent to 8,367."
And yet, experts maintain that Toronto's housing market will shift again this year, bouncing back into warmer territory as more competition stokes higher prices
"New listings continued to drop year-over-year in the GTA. Recently released Ipsos polling suggests buying intentions have picked up for 2023," said TRREB Chief Market Analyst Jason Mercer on Friday.
"This increased demand will run up against a constrained supply of listings and lead to increased competition between buyers. This will eventually lead to renewed price growth in many segments of the market, especially those catering to first-time buyers facing increased rental costs."
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