As a world-class city, housing in Toronto has long been in high demand. With steadily rising prices over the past decade, a strong seller’s market would eventually become the defining factor of the city’s real estate market. Then, in early 2020, the already competitive market would see an unparalleled spike in activity. 

Following the Bank of Canada’s strategic lowering of its target interest rate, Toronto saw a sizable influx of buyers entering the market. These factors shattered sales records and established new trends among buyers and sellers alike.  

Now in 2023, after multiple increases from the Bank of Canada, Toronto’s housing market has cooled off noticeably becoming more balanced. However, there are some common misconceptions about what these new market conditions mean for both buyers and sellers. 

Market Neutrality 

Today, as the national and local economies transition to post-pandemic conditions, inflation and other market factors are impacting the landscape of Canadian real estate. As inflation rates broke new records throughout the first half of 2022, the Bank of Canada announced it would slowly hike its target interest rate to combat the damages of over-lending. These hikes saw the target rate climb from 0:25% to 1.5%, making it more expensive and difficult for many potential buyers to obtain adequate financing. 

As a result, fewer home buyers are entering today’s market compared to the past two years. However, homes in Toronto are still being listed for sale at similar rates as they were during the pandemic. This has led the previously heavy seller-favouring housing market to begin slowly balancing out. 

While these new trends have inspired some media outlets and even local real estate agents to declare a Toronto buyer’s market, in reality, conditions are more neutral than one-sided. 

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Looking for more insights about Toronto’s evolving real estate market? 

• Suburb vs. Exurb – What’s The Difference?
• 2022 Luxury Market Real Estate Outlook
• How Will Recent Interest Rate INcrease Impact Buyers and Sellers in Toronto?

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Inventory & Averages

Compared to the past two years, Toronto’s present real estate landscape is less active overall. While new homes are still entering the market, the total number of transactions is down year-over-year. Another noticeable change is how long homes are spending on the market. While homes are still selling, reduced competition between buyers has made the previously fast-paced offer process slower. In addition, competitive tactics like bully offers are less common. 

As fewer buyers enter the market, the available housing inventory in Toronto is slowly building up. This has allowed today’s buyers to take advantage of a wider selection of available homes. 

Pricing

While certain conditions have become more advantageous for buyers, such as greater inventory selection, other factors remain relatively unchanged. Primarily, the average sale prices for homes in Toronto are yet to be significantly impacted. While each home is unique and trends can change in the future, sellers entering today’s market are still fielding strong offers on their homes. 

As buyer demographics have shifted in the past decade, property marketing trends have also evolved to appeal to new millennial buyers. Read our blog post about the topic here. 

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Selling your home as part of your greater retirement plan? Explore these insightful posts from our blog. 

• Transitioning Into Retirement As a Business Owner
• Renovations For Active Retirees
• Diversifying Your Investment Portfolio Into Retirement

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What Sellers Must Know

As a seller, it is important to understand how neutral market conditions will affect your home sale. While it may seem discouraging to have missed the hot seller’s market window, there are still plenty of opportunities to enjoy a successful home sale, and see a great return on your investment. 

With generally neutral conditions in today’s market, working with the right real estate agent is more crucial than ever. Beyond simply adding a ‘for sale’ sign to your front lawn, your agent is responsible for ensuring your home is adequately prepared for listing, well-marketed, and helping you navigate offers and negotiations.

Despite shifting trends, our team’s unique full-spectrum approach to selling can ensure you achieve exceptional success on the market. Learn more about how we sell with sophistication here.