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Compared to early 2022’s pre-rate hike sales, this February’s sales in the Greater Toronto Area (GTA) had fallen substantially. Simultaneously, the number of new listings also dropped over the course of the year. The result? The average selling price and MLS® HPI continued to level off after trending lower through the spring and summer of last year.
Toronto Regional Real Estate Board (TRREB) President Paul Baron spoke on these trends: “It has been almost a year since the Bank of Canada started raising interest rates. 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. The share of home purchases below one million dollars is up substantially compared to this time last year.”
GTA REALTORS® reported 4,783 sales through TRREB’s MLS® System in February of 2023 – down 47% from the previous February, the last full month before the onset of interest rate hikes. The number of new listings in the system was similarly down 40.9%, with 8,367 listings.
“New listings continued to drop year-over-year in the GTA,” according to TRREB Chief Market Analyst Jason Mercer. “Recently released Ipsos polling suggests buying intentions have picked up for 2023. 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.”
The average selling price for February 2023 was $1,095,617 – down 17.9 per cent compared to February 2022.
Some of this decline is attributable to the fact that the share of sales below $1,000,000 was 57 per cent in February 2023 versus only 38 per cent a year earlier. On a monthly basis, the average price followed the regular seasonal trend, increasing relative to January 2023. The MLS® Home Price Index (HPI) Composite Benchmark was down year-over-year by a similar annual rate of 17.7 per cent, but was also up on a monthly basis.
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