A TRYING OCTOBER – WHAT’S HAPPENING IN THE MARKET?

The housing market in the GTA faced some challenges in October 2023. The main issue was the lack of affordability, which made it difficult for many potential home buyers to make a purchase. Due to this and the uncertainty, the sales decreased slightly compared to the previous year’s same period. However, the selling prices continued to rise compared to October 2022.

Despite these challenges, the GTA’s economy continued to be strong, and the population continued to grow, which maintained the overall demand for housing. Nevertheless, a lot of people were considering the rental market instead of buying a home due to high borrowing costs and uncertainty regarding interest rates. The home sales are expected to increase quickly once the mortgage rates start trending lower.

The total number of GTA home sales reported through TRREB’s MLS® System in October 2023 was 4,646. This figure was 5.8% down compared to October 2022, and sales were also lower than September 2023 on a month-over-month seasonally-adjusted basis.

In October 2023, new listings increased significantly compared to the 12-year low reported in October 2022. Nevertheless, the increase was more modest compared to the 10-year average for October. New listings, on a seasonally adjusted basis, slightly decreased compared to September 2023.

The MLS® Home Price Index Composite benchmark and the average selling price both saw an increase on a year-over-year basis in October 2023, by 1.4% and 3.5% respectively. On a seasonally adjusted basis, the MLS® HPI Composite benchmark slightly decreased compared to September 2023, while the average selling price remained at a similar level. Both the MLS® HPI Composite benchmark and average price remained above the cyclical lows experienced at the beginning of 2023.

The average selling price remained above last year’s level in October 2023, thanks to the competition between buyers. The Bank of Canada acknowledged this resilience in its October statement. However, home prices are still below their record peak reached at the beginning of 2022, which has mitigated the impact of higher borrowing costs to some extent.

It is disappointing that uninsured mortgage holders reaching the end of their current term have not received any relief in the current environment of extremely high borrowing costs. Borrowers looking for a more competitive rate are still forced to qualify at rates approaching 8%, which is unrealistic. The Office of the Superintendent of Financial Institutions should have eliminated this qualification rule for those renewing their mortgages with a different institution following their recent round of consultations.