Most of Toronto and the GTA saw downward trend in detached home prices during the first six months of 2023 compared to the same period in 2022, a new report by Re/Max Canada says. This trend is despite a surge in home-buying activity in the second quarter of 2023, prompted by significant home value reductions in the first quarter.
“Anxious homebuyers were quick to identify the bottom of the market and jumped in with both feet in the second quarter of the year,” said Christopher Alexander, president of Re/Max Canada, in the report. “The short burst of home-buying activity clearly underscored the resilience of the housing market, but the lack of inventory available for sale curtailed any real momentum from building.”
Only four neighbourhoods in Toronto bucked the trend: the Palmerston-Little Italy, Trinity-Bellwoods, Dufferin Grove area saw a 16 per cent price increase, Cabbagetown saw an 11 per cent price increase, Rosedale and Moore Park prices went up 4 per cent and Banbury-Don Mills, Parkwoods-Donalda detached homes went up 3.7 per cent in price.
The report also found an overall decline in sales of detached homes and decline in new listings year-over-year. Out of 60 markets in the GTA, 29 reported a decline in new listings in June 2023 compared to June 2022. High Park, North Junction, Bloor West Village saw the greatest decline — listings were down 58.1 per cent.
Three other neighbourhoods reported a double digit decline in listings: Rosedale-Moore Park (48.3 per cent), Leaside (40 per cent) and Riverdale and Leslieville (26.1 per cent).
With such low supply, it was affordability that drove most purchasing decisions in the GTA. The report found demand was greatest for detached homes priced under $2 million in the second quarter, with sales more than doubling between the first and second quarter in key GTA markets. The report pointed to a 104 per cent increase in home-buying activity in the second quarter compared to the first quarter in York Region. “Affordability was a major factor given detached properties in the 905 area code are priced significantly less than similar homes located in the 416 area code,” the report noted.
And three Toronto neighbourhoods benefited from the search for more affordably-priced detached homes — in the Bayview Village, Don Valley Village, Henry Farm area, sales were up 21.4 per cent thanks to the neighbourhood’s second lowest detached home price in the central core. With the lowest price in the central core, Bathurst Manor and Clanton Park also saw a just over 1 per cent increase in sales. And the Alderwood, Long Branch and New Toronto neighbourhood, with an average detached home price of $1.4 million, saw a 9.3 per cent increase in sales.
“With inflation coming in hotter than expected in July, the Bank of Canada is forecast to raise rates yet again in September,” Elton Ash, executive Vice President of Re/Max Canada, said in the report. “If that holds true, home-buying activity will likely remain subdued for the foreseeable future.”
