• Thu. Dec 7th, 2023

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Toronto housing market ends year with a whimper with benchmark prices down 8.9%



Toronto’s housing market ended 2022 with a whimper, with sales off nearly 50 per cent from last December and benchmark and average selling prices down 8.9 per cent and 9.2 per cent, respectively, from a year ago.

While data released Thursday by the Toronto Regional Real Estate Board showed the average price of a home sold over the course of the year checked in at $1,189,850 — about 8.6 per cent above the average selling price in 2021 — those gains were largely attributable to strength early in the year. As inflation peaked and the Bank of Canada turned up the heat on interest rates, home prices in the region began slipping back to the million-dollar mark.

“Following a very strong start to the year, home sales trended lower in the spring and summer of 2022,” said new Toronto Regional Real Estate Board (TRREB) president Paul Baron in the report.

“As aggressive Bank of Canada interest rate hikes further hampered housing affordability with no relief from the Office of Superintendent of Financial Institutions (OSFI) mortgage stress test or other mortgage lending guidelines including amortization periods, home selling prices adjusted downward to mitigate the impact of higher mortgage rates.”

However, there were signs the market adjustment may be coming to an end, Baron said, as home prices began levelling off in the late summer.

Much like other competitive Canadian markets, new home listings were also down in 2022 year over year. There were 152,873 new listings reported through TRREB’s MLS system — accounting for an 8.2 per cent decline compared to 166,600 new listings in 2021. Home sales, at 75,140 units, did not fare any better, down 38.2 per cent from 2021’s record of 121,639 units.

“While home sales and prices dominated the headlines in 2022, the supply of new listings continued to be an issue as well,” TRREB chief market analyst Jason Mercer said in the report.

Mercer said the listings shortage helped explain why price declines slowed to end the year.

On a month-over-month basis, December’s composite benchmark price was down just 0.77 per cent to $1,081,400 from $1,089,800 in November, though the average selling price was down 9.28 per cent.

Sales also showed a glimmer of hope, increasing by 1.1 per cent despite being down 48 per cent from December 2021.

TRREB CEO John DiMichele says there are two opposing forces buffeting the housing market.

“On the one hand, we will continue to feel the impact of higher borrowing costs. On the other hand, record levels of immigration will support demand for ownership and rental housing, while we struggle to come to terms with a housing and infrastructure deficit in the Greater Golden Horseshoe,” DiMichele said in the report.

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