Market Report | November 2023

High borrowing costs and uncertain economic conditions continued to weigh on Greater Toronto Area (GTA) home sales in November 2023. Sales were down on a year-over-year basis, while listings were up from last year’s trough in supply. With more choice in the market, selling prices remained basically flat year-over-year.

“Inflation and elevated borrowing costs have taken their toll on affordability. This has been no more apparent than in the interest rate-sensitive housing market. However, it does appear relief is on the horizon. Bond yields, which underpin fixed rate mortgages have been trending lower and an increasing number of forecasters are anticipating Bank of Canada rate cuts in the first half of 2024. Lower rates will help alleviate affordability issues for existing homeowners and those looking to enter the market,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.

GTA REALTORS® reported 4,236 sales through TRREB’s MLS® System in November 2023 – a six per cent decline compared to November 2022. Over the same period, the number of new listings was up by 16.5 per cent. On a seasonally adjusted monthly basis, sales edged up compared to October 2023, while new listings were down by 5.5 per cent.

The MLS® Home Price Index Composite benchmark and the average selling price, at $1,082,179, in November 2023 were basically flat in comparison to November 2022. On a seasonally adjusted monthly basis, the MLS® HPI Composite benchmark was down by 1.7 per cent. The average selling price was down 2.2 per cent month-over month.

“Home prices have adjusted from their peak in response to higher borrowing costs. This has provided some relief for buyers, from an affordability perspective. As mortgage rates trend lower next year and the population continues to grow at a record pace, expect demand to increase relative to supply. This will eventually lead to renewed growth in home prices,” said TRREB Chief Market Analyst Jason Mercer.

“Houses and condos are meant to be homes, first and foremost. We know the demand for homes, both rental and ownership, will grow for years to come. We have seen some productive policy decisions recently that should help with housing affordability, including allowing existing insured mortgage holders to switch lenders without the stress test. Additionally, in the interest of household and economic stability, we continue to call on the Office of the Superintendent of Financial Institutions (OSFI) to apply the same approach to uninsured mortgages. It also goes without saying that further policy work is required to bring more supply online,” said TRREB CEO John DiMichele.

Key Highlights from the report

• Home sales decreased by 6% year-over-year.

• New listings increased by 16.5% compared to the previous year.

• High inflation and borrowing rates are influencing market dynamics.

• Year-over-year selling prices remained flat.

• A decrease in Bank of Canada rates is anticipated in 2024, potentially boosting market activity.

• Detailed statistical data covers various housing types, prices, and regional details.

• Insights provided are crucial for strategic real estate investment and forecasting.

Report summary

The November 2023 Market Watch Report, provided by the Toronto Regional Real Estate Board, of the Greater Toronto Area's real estate market, reflecting trends impacted by economic conditions and borrowing costs. As of November 2023, a year-over-year decrease in home sales (-6%) contrasts with an increase in new listings (+16.5%). High inflation and borrowing rates have tempered market activity, maintaining flat year-over-year selling prices. The report anticipates potential relief with forecasted Bank of Canada rate cuts in 2024, which could improve affordability and stimulate market growth. The detailed statistical breakdown covers various housing types, prices, and regional specifics, offering valuable insights for strategic real estate investment and market forecasting.

Read the Full Report