With the ebb and flow of the housing market, September demonstrated a noteworthy downward fluctuation in the Greater Toronto Area (GTA). Home sales in the GTA experienced a 7.1% slide in September 2023 compared to the same period in the previous year. The impact was particularly felt in the sales of semi-detached houses and townhouses, recording a notable decline.
The Factors at Play
Drilling down into the details, data from the Toronto Regional Real Estate Board (TRREB) reveals that the 4,642 home sales last month also marked a 12.1% month-over-month dip from August. A concoction of factors may be at play here, contributing to this downtrend.
High borrowing costs have been a major contributing factor in curbing the demand for property. Beyond that, high inflation rates and uncertainty surrounding the Bank of Canada’s forthcoming decisions also played a role in slowing the market. Additionally, slower economic growth amidst global events has also played its part in dampening the home buying enthusiasm.
Countering the Decline: Rising Prices and Surging Listings
Despite the drop in home sales, the average home price saw an upward trend. The average home price in the GTA reached $1,119,428, a growth of 3.4% higher than in August, and a y-o-y increase of three percent. This rise in prices indicates that while the volume of sales may have decreased, the value of properties continues to grow, showcasing the resilience of the GTA’s housing market.
An interesting development to note was the surge in new listings. In September, new listings saw a dramatic increase of 44.1% compared to the lows of September 2022. This surge also follows a month-over-month upward trend in the number of listings. Such a surge in listings while demand is softening could mean buyers might have more choices, potentially leading to a market with more balanced negotiating power between buyers and sellers.
Looking Forward: A Mid-2024 Turnaround?
As we sift through the multiple factors impacting the downward slide in home sales, the prevalent high borrowing costs emerge as a significant player. As per TRREB President Paul Baron, these elevated borrowing costs are expected to hold steady until mid-2024. After this period, they are predicted to start trending downward, leading to increased demand for homeownership in the latter half of the year.
FAQs About GTA Homes
Whether it’s better to buy a condo or a house in Canada depends on your individual needs, lifestyle, and financial situation. Houses typically offer more space and privacy, and often come with yards, which can be great for families or people with pets, however, they also usually have higher costs and require more maintenance. Condos could be a better choice for individuals or small families who value a low-maintenance lifestyle and enjoy community living with amenities like a gym or swimming pool.
In the year 2023, the city of Toronto is witnessing the construction of approximately 32,000 new condominium units.
The main difference between a condo and a townhouse in Canada lies in the type of ownership. With a condo, you own your individual unit, plus a share of the common areas. Condos are also often part of high-rise buildings. A townhouse, on the other hand, is a multi-floor home that shares one or two walls with adjacent properties but the owner typically owns the interior and the exterior, including any yard space.
The condo market fluctuates due to various factors such as economic conditions, supply and demand, and regulatory changes. For the most updated information on condo prices in Toronto, it’s recommended to check the latest reports from real estate agencies or the Toronto Regional Real Estate Board (TRREB).
While the current figures indicate a slowdown in the GTA home sales, market dynamics is a complex picture influenced by multiple national and global factors. A careful balance between high borrowing rates, property pricing, inflation, and the availability of homes for sale could result in a potential upsurge in demand by the middle of next year. As always, it’s worth keeping a watchful eye on market trends and forecasts to thoroughly understand the ever-evolving landscape of GTA’s housing market.