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In 2022, the housing market in the Greater Toronto Area (GTA) finally saw a slow in growth after record highs in 2021. The shortage of housing supply in the area was already causing affordability problems, but this issue was further worsened by the Bank of Canada increasing interest rates throughout the year.
After a robust start of the year, home sales dropped over spring and summer 2022 due to the interest rates hike. The Office of Superintendent of Financial Institutions (OSFI) mortgage stress test and other mortgage lending guidelines (like amortization periods) failed to ease, home buyers struggled to afford prices and home prices began to fall to counteract the lower demand.
By the time summer came around, home prices began to stabilize, which suggests the strong market adjustments may now be ending.
In 2022, the Toronto Regional Real Estate Board (TRREB)’s MLS® System reported 75,140 sales — that’s a 38.2% decrease from 121,639 in 2021, which was a record. Plus, there were 152,873 new listings in 2022, which is a decrease of 8.2% compared to 2021 (when there were 166,600 new listings). According to seasonally-adjusted monthly data, there has been a significant leveling of house prices and sales since the end of summer.
In 2022, the average selling price was $1,189,850 — a 8.6% increase from 2021, when the average price was $1,095,333. However, the increase is mostly down to quick rises at the start of 2022, which slowed down for the rest of the year.
Yet although home sales and prices received a lot of attention last year, it’s important to remember that the shortage of new listings was also an important story. Fewer homes were available than in 2021, which partly explains the recent rise in selling prices.
The limited supply also affected the rental market — greater demand for renting due to lower mortgage affordability led to prices increasing significantly.
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