A MORE BALANCED SEPTEMBER: WHAT’S HAPPENING IN THE MARKET?

The GTA housing market faced some challenges in September, as high borrowing costs, inflation, and slower economic growth weighed on home sales. Nonetheless, despite the increase in listings supply, the average selling price remained higher than the previous year.

Looking ahead, the short-term and medium-term outlooks for the GTA housing market appear to be somewhat different. In the short term, borrowing costs are expected to remain high until mid-2024, after which they are projected to decrease. This suggests that we could see a marked increase in demand for ownership housing in the second half of next year, as lower rates and a growing population encourage more buyers.

According to REALTORS®, there were 4,642 home sales through TRREB’s MLS® System in September 2023, a decrease of 7.1% compared to September 2022. Ground-oriented homes, particularly semi-detached houses and townhouses, experienced a more significant year-over-year drop in sales. Sales were also slightly down on a month-over-month, seasonally-adjusted basis.

New listings showed a strong year-over-year increase compared to the extremely low level in September 2022. On a month-over-month, seasonally-adjusted basis, the number of listings also trended upward.

The MLS® Home Price Index (HPI) Composite benchmark increased by 2.4% year-over-year, while the average selling price rose by 3% over the same period. On a month-over-month, seasonally-adjusted basis, both the average selling price and the MLS® HPI Composite benchmark slightly decreased by less than 1%.

While GTA home selling prices are still above the early 2023 trough, a more balanced market was observed in the summer and early fall, with a noticeable increase in listings relative to sales. This suggests that some buyers may have more bargaining power in the short term, which could help offset the impact of high borrowing costs.

TRREB’s annual consumer polling has shown that half of all intending home buyers in Toronto are first-time buyers in any given year. The average price of a condo apartment in Toronto is over $700,000, yet the first-time buyer exemption threshold for upfront land transfer tax has remained at $400,000 for the past 15 years. With this in mind, TRREB welcomes the Toronto City Council’s request for a report on a more appropriate exemption level moving forward. Many housing and taxation policies are currently in opposition, and we need all levels of government to align policies and work collaboratively to address the ongoing housing crisis.