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📉 NOVEMBER 2023 Market Watch

📉 NOVEMBER 2023 Market Watch

In November 2023, Greater Toronto Area (GTA) home sales faced headwinds from high borrowing costs and economic uncertainty, resulting in a six percent year-over-year decline, as reported by the Toronto Regional Real Estate Board (TRREB). However, amidst these challenges, the market experienced a surge in listings, offering more choices for potential buyers compared to the previous year's supply trough.

Affordability Challenges: The impact of inflation and elevated borrowing costs manifested in a notable dip in affordability, particularly in the interest rate-sensitive housing market. TRREB President Paul Baron highlighted this concern but expressed optimism, citing decreasing bond yields and forecasts of potential Bank of Canada rate cuts in early 2024. Lower rates are expected to alleviate affordability challenges for both existing homeowners and prospective buyers.

Market Statistics: GTA REALTORS® reported 4,236 sales in November 2023, marking a six percent decrease compared to the same month in 2022. Concurrently, new listings experienced a significant uptick, rising by 16.5 percent, providing a more balanced market with increased options for buyers. On a seasonally adjusted monthly basis, sales showed a slight increase from October 2023, while new listings declined by 5.5 percent.

Price Adjustments and Future Projections: The MLS® Home Price Index Composite benchmark and the average selling price remained relatively flat year-over-year, signaling a stabilization in response to higher borrowing costs. TRREB Chief Market Analyst Jason Mercer anticipates a renewed growth in home prices as mortgage rates trend lower in the coming year and the population continues to grow.

Policy Decisions and Calls for Action: TRREB CEO John DiMichele emphasized the importance of homes as fundamental living spaces and acknowledged recent policy decisions contributing to affordability, such as allowing insured mortgage holders to switch lenders without stress tests. Additionally, DiMichele urged the Office of the Superintendent of Financial Institutions (OSFI) to adopt a similar approach for uninsured mortgages. Further policy initiatives are deemed necessary to address the ongoing demand-supply imbalance.

In summary, the GTA real estate market in November 2023 faced challenges but also showed resilience and adaptability. As economic conditions evolve and policies respond, the market is poised for potential growth, offering opportunities for both buyers and sellers in the dynamic Toronto real estate landscape.