Condo developer and real estate broker Brad Lamb has seen it all. Here’s what he’s predicting for the year ahead, from supply shortages to a recession in the rear-view.
What can we expect out of the housing market in 2023?
The resale market will be soft until rates start to decline. Volume of monthly MLS resales will likely stay at 50 per cent of a typical year until that time. Condo pricing is holding up reasonably well and will likely edge a little lower than the end of 2023.
Will a home price drop in 2023, make housing more affordable?
Any price advantage is being swamped by high interest costs. After a deliberate escalation of mortgage pricing, real estate is always going to fare the worst.
What do you predict for when the interest rate stabilizes?
Predicting future events is what everyone wants to see, but it is impossible to know. My prediction is that rates will start falling by mid-2023. If I am correct in that, once the Bank of Canada rate falls approximately 1.5 per cent (to 2.5 to 2.75 per cent), the market will surge back and quickly overshoot the previous peak.
What building trends do you anticipate for 2023?
The only trend for housing is trying to find ways to make it more affordable, which just means “smaller.”
Will the housing market “rebound” in 2023?
We have a disastrous shortage of housing in Toronto, one of the worst situations in the First World. It will never be corrected as long as Toronto continues to grow, and even if growth slows down, there is a massive 20-year supply shortage in place. House prices and condo prices will recover in 2023, probably toward the third quarter of the year. Most developers will likely get active again in the last quarter. All the lost pricing will be regained once rates start to fall. By early 2024, this fabricated recession will be in the rear-view mirror.
Toronto just released a new housing plan for 2023; does it sound achievable?
The goal is to build more housing (namely 285,000 over a decade). It is fine to make that the target, but the target has zero chance of being met. And gentle density will not resolve the acute shortages we have in the city. It is like putting a band-aid on a leaking dam. We need big, bold density change.