The Toronto Regional Real Estate Board has just released their numbers for the month of August and I am excited to share them with you.
Higher borrowing costs, continued uncertainty about the economy and Bank of Canada decision making, and the constrained supply of listings resulted in fewer home sales in August 2023 compared to August 2022. The average selling price remained virtually unchanged over the same period. On a seasonally adjusted monthly basis, sales and average price edged lower.

There were 5,294 sales reported in August 2023, a decline by 5.2% compared to August 2022. New listings were up by 16.2% year over over, providing some relief on the supply front, but year to date listings are still down substantially compared to the same period last year. Seasonally adjusted sales were down slightly by 1% month over month compared to July 2023, while new listings were up slightly by 1.3% compared to July.

The Home Price Index Composite benchmark for August 2023 was up by 2.5% year over year. The average selling price was also up, but by less than 1% to $1,082,496 over the same timeframe. On a month over month seasonally adjusted basis, the Composite benchmark was virtually unchanged and the average price edged lower by 1.6%.

More balanced market conditions this summer compared to the tighter spring market resulted in selling prices hovering at last year’s levels and dipping slightly compared to July. As interest rates continued to increase in May, after a pause in the winter and early spring, many buyers have had to adjust their offers in order to qualify for higher monthly payments. Not all sellers have chosen to take lower than expected selling prices, resulting in fewer sales.

While higher interest rates have certainly impacted affordability, the prospect of higher taxes will also hit households’ balance sheets, especially younger buyers with limited savings. With the City of Toronto moving to raise the municipal land transfer tax (MLTT) rate on properties over $3 million as a revenue tool, it must also consider helping first time home buyers struggling to enter the market by adjusting their tax rebate threshold to reflect today’s higher home prices. 

As of today, the Bank of Canada held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is also continuing its policy of quantitative tightening. The Canadian economy experienced a contraction in the second quarter, and the unemployment rate has been steadily rising for three consecutive months, further contributing to the decision to keep rates steady.

All three levels of government need to be focused on the key issue impacting affordability in the GTA: lack of supply. Right now, there continues to be a policy mismatch between population growth through immigration and temporary migration and bringing online enough housing to accommodate this population growth. If we can’t house newcomers, they will look elsewhere, and Canada and the GTA will lose its competitive edge on the global stage.

Looking forward, we know there will be a solid demand for housing – both ownership and rental – in the GTA and broader Greater Golden Horseshoe. Record immigration levels alone will assure this. In the short term, we will likely continue to see some volatility in terms of sales and home prices, as buyers and sellers wait for more certainty on the direction of borrowing costs and the overall economy.

CLICK HERE for the Full Market Report.

Find Your Home Value.