FOR IMMEDIATE RELEASE
Challenges in Affordability and Uncertainty Impact GTA Housing Market
TORONTO, ONTARIO, November 2, 2023 – The Greater Toronto Area (GTA) grappled with affordability issues and uncertainty in October 2023, leading to a cautious approach among potential homebuyers. Despite a resilient GTA economy and substantial population growth, buyers remained hesitant due to elevated borrowing costs and unclear trends in interest rates. Consequently, home sales experienced a decline compared to the same period last year. However, selling prices maintained their strength, surpassing levels recorded in the previous year.
TRREB President Paul Baron explained, “The GTA continues to witness strong housing demand, particularly in the rental market. However, the surge in borrowing costs and uncertainty about interest rate trends have caused potential homebuyers to adopt a wait-and-see attitude. We anticipate a swift increase in home sales once mortgage rates start to decrease.”
In October 2023, TRREB's MLS® System reported 4,646 home sales in the GTA, marking a 5.8% decrease from October 2022. Sales also experienced a decline on a month-over-month seasonally adjusted basis compared to September.
While new listings in October 2023 showed a noticeable increase from the 12-year low reported in October 2022, the growth was more moderate when compared to the 10-year October average. On a seasonally adjusted basis, new listings experienced a slight decrease compared to September 2023.
On a year-over-year basis, the October 2023 MLS® Home Price Index Composite benchmark and the average selling price rose by 1.4% and 3.5%, respectively. However, on a seasonally adjusted basis, the MLS® HPI Composite benchmark decreased slightly compared to September 2023, while the average selling price remained stable. Both indicators remained above the cyclical lows witnessed at the beginning of 2023.
TRREB Chief Market Analyst Jason Mercer noted, “Despite the challenging environment, strong buyer competition maintained selling prices above last year's levels and the lows experienced earlier this year. While borrowing costs remain high, the impact has been mitigated to some extent by lower home prices, which are significantly below the record peak observed in early 2022.”
Expressing concern, TRREB CEO John DiMichele stated, “It is disappointing to observe that uninsured mortgage holders reaching the end of their current term have not received any relief amid the current high borrowing costs. These borrowers are constrained by stringent qualification rules, hindering their ability to secure competitive rates. We urge the Office of the Superintendent of Financial Institutions to reconsider these rules, especially for those renewing their mortgages with different institutions.”