What is the state of the Toronto real estate market today? 

As the Bank of Canada’s inflation-fighting tightening cycle hardly made a dent in one of the world’s largest and most expensive housing markets, prospective homebuyers might wonder when the best opportunity would be to acquire a residential property in this climate before prices surge even more. Sellers might be pleased that the central bank’s rate hikes did not eviscerate demand. Industry observers are wondering if there is anything that could eradicate demand and crash prices. 

Indeed, North America’s fourth-largest city might be made from Teflon since conditions generally remain bullish despite today’s rising-rate climate and a slowing economy.  

After the latest market data, the public has four questions that need to be answered: 

  1. Are Real Estate Prices Dropping in Toronto? 
  2. Is Toronto Real Estate Cheaper Than Vancouver? 
  3. Will Toronto Real Estate Keep Going Up? 
  4. What is the Best Month to Buy a House in Toronto? 

So, let’s explore these questions one by one. 

A Look at the Toronto Real Estate Market Today 

Here is a look at these four critical questions: 

Are Real Estate Prices Dropping in Toronto?

According to the Toronto Regional Real Estate Board (TRREB), the average selling price in July advanced more than four percent to nearly $1.2 million, up from $1.073 million at the same time a year ago. On a seasonally adjusted basis, the average sales price for a residential property in Toronto was relatively unchanged, sliding just 0.7 per cent to $1.153 million. 

Average prices in Toronto have remained above $1 million for all of 2023 and continue to be higher than they were in 2020 and 2021. It should be noted that July 2023 prices were higher than they were in July 2020, 2021, and 2022, real estate association data show. 

Is Toronto Real Estate Cheaper Than Vancouver?

Like Toronto, the Vancouver real estate market is one of the most expensive sectors in the world. But is it more expensive or more affordable than Toronto? 

Data from the Real Estate Board of Greater Vancouver (REBGV) show that MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver was slightly above $1.2 million in June. This was down 2.4 per cent year-over-year and up 1.3 percent from May. 

In the end, Vancouver is slightly costlier than Toronto, but the difference is negligible. 

Will Toronto Real Estate Keep Going Up?

This summer, many newspapers are reporting various housing listings showing properties selling way above their prices. But how is this possible when mortgage rates are near six percent? It’s simple: supply and demand. 

If the COVID-19 public health crisis, rampant inflation, and 22-year high interest rates could not decimate the Toronto real estate market, does this mean prices will only go higher? In other words, will the Toronto housing sector keep going up? 

Market experts assert that supply is failing to keep up with demand. And, as population levels continue to climb, the city could endure a crushing housing shortage, which could result in higher prices. Between 2019 and 2021, Statistics Canada learned that Toronto’s population grew more than one percent, adding about 85,000 people. The numbers are expected to climb in the coming years amid the tremendous wave of international migrants arriving in Canada’s largest city. 

Meanwhile, the Bank of Canada is widely anticipated to start easing monetary policy sometime next year. This will make borrowing cheaper and bolster demand for mortgages, adding to the supply-demand imbalances and, of course, higher prices. 

What is the Best Month to Buy a House in Toronto?

There has been quite a debate in the housing industry as to when is the best time to acquire a home, be it in Toronto or elsewhere in the Canadian real estate market. 

The two months that are typically cited as January and August. 

Here is what CIBC stated about why January is an optimal month for market participants: 

January is the best time to make an offer on a home. Not many buyers want to brave the cold to shop for a home, so prices are the lowest. Properties also take longer to sell. This means sellers are more likely to accept a lower offer. 

The market picks up from February onward. Spring is the busiest time of year to buy a home. More properties become available, prices go up and competition increases. Homes also look more presentable in spring. Buyers often purchase in the spring so they can move into their new home during the summer. 

House prices peak in the hot season, especially in June and July. By fall, prices usually drop and so does the number of listed homes. The market often freezes in December, partially because of the holidays.” 

What about August? The primary reason is that this is the final month of the period where listings are most abundant, as peak supply occurs between June and August. 

What Now? 

As the Canadian real estate market looks ahead to 2024, buyers, sellers, real estate agents, and policymakers will assess plenty of other aspects. The next calendar year will be a fascinating time to monitor from population levels to inventories to new housing construction.