Last Updated on February 23, 2024 by CREW Editorial
As we approach the midpoint of 2023, it’s a ripe opportunity to cast a broader view on the trends shaping Toronto’s vibrant real estate market.
The Toronto Regional Real Estate Board (TRREB), a reputable source of insight into the city’s property landscape, recently unveiled its Housing Market Charts for May 2023. These charts unveil a treasure trove of data that offers valuable insight into the market’s current trajectory and potential future directions.
Let’s first turn our attention to the MLS Sales data. Year after year, it reveals a consistent seasonal trend – sales tend to surge in the balmy days of spring and extend into the summer months. The reason for this is multi-faceted:
- Better weather encourages house viewings.
- Families prefer to move during the summer break.
- The appealing spring and summer aesthetics boost curb appeal.
As we continue to move through 2023, the market is behaving similarily to the preceding three years, with sales figures closely mirroring those of past cycles.
However, beyond this recurrence, a closer inspection reveals an intriguing pattern. The sales trend line, computed using a twelve-month moving average, indicates a gradual but steady increase in sales since the year 2020. This trend underscores a subtle but palpable growth in the activity of the real estate market, reflecting perhaps a rising confidence among buyers and sellers in Toronto’s property landscape after the disasterous years during the COVID-19 pandemic.
Of course, others in the industry are predicting a cooling off of housing prices later into 2023, followed by another significant recovery in 2024 and 2025. This outcome will depend on several external factors, but potential investors should not ignore the current trendline.
Akin to sales, new listings exhibit a similar seasonal footprint. With spring’s arrival, the number of new listings experiences a hike, likely triggered by sellers eager to leverage the peak buying season’s momentum. Yet, unlike the trend in sales, the trend line for new listings reveals a minor decline over the last year. This suggests that the inventory – the number of properties available for sale – may be tightening, indicating a possible future scenario of demand outstripping supply. New housing is badly needed in urban centres such as Toronto, but .
Among the various indicators of market conditions, the Sales-to-New Listings Ratio (SNLR) holds substantial importance. A high ratio indicates a seller’s market – when demand surpasses supply, thus empowering sellers. In contrast, a lower ratio points towards a buyer’s market, where abundant supply caters to the buyers’ needs.
The SNLR for the year 2023 looks to maintain a steady cadence, hinting towards a balanced market. However, a closer examination of the chart plotting the SNLR against the annual price growth unveils a positive correlation. This relationship implies that with an increase in the SNLR, the average annual price change follows suit, underscoring the direct influence of market balance on property prices.
Turning to the average resale home price, it continues its upward march, further corroborated by the trend line’s persistent rise since 2020. This continued price appreciation points to the resilience of the Canadian real estate market, even in the face of global adversities such as the ongoing pandemic. Home values are not just holding steady; they’re appreciating, demonstrating the inherent robustness of Toronto’s property market.
To sum up, the wealth of data offered by TRREB paints a vivid picture of a healthy and resilient real estate market. Despite the ongoing challenges posed by the pandemic, the market continues to exhibit signs of strength and stability. Yet, the hint of tightening inventory, as suggested by the new listings trend, implies that potential buyers may soon be wrestling with increased competition. This emphasizes the importance of staying abreast of market trends and working with a knowledgeable real estate professional who can navigate the intricacies of the market effectively.
As we move forward in 2023, stay tuned for further updates and insights. We’ll continue to decode the trends and events shaping Toronto’s dynamic real estate market, keeping you well-informed and ready to make the most of your real estate decisions.
