Toronto Real Estate

                                                     Toronto Real Estate Market Report June 2023                  

Sales Summary

Toronto Real Estate Market Report June 2023Sales for May on TRREB were 24% higher than in May of 2022. This is the first month this year that sales were higher than the same month in 2022. At 9,012 sales this will be the biggest sales month in 2023. How do we know? April, May, or June are normally the biggest sales months of the year. But in early June the Bank of Canada raised its prime rate to 4.75% (up 25 basis points). The Bank’s prime rate had remained at 4.5% since January of this year.

In previous posts, we had stated that it is not just the level of interest rates but ‘rate certainty’ that impacts buyers. With the rate fixed in January, we saw a slow but steady improvement in the real estate market. With this latest increase and a fear of another 25-point increase over the summer, some buyers are moving to the sidelines. The Market had already showed signs of slowing in late May and this rate increase will just add to the soft market.

Given this backdrop, where are real estate prices headed? The answer lies with the number of new and active listings. New Listings are 19% lower than the same month last year and active listings are 23% lower. All with sales being 24% higher than the same month last year. Potential sellers have decided that they don’t need to lower their asking price or even offer their property for sale. But the pressure of higher mortgage rates and costs will soon force some people to sell. Most Canadians take out a five-year fixed rate mortgage when they buy. On average, 20% of these mortgages come up for renewal each year. Mortgage rates only began to increase a year ago. We expect to see more forced sales in 2024 unless the Bank of Canada begins to lower its rates.

See the Graph below which tracks the Bank of Canada Overnight Rate, Sales, and New Listings by month over the last twelve months.

Toronto Real Estate Market Report 2023


TAKEAWAYS

 It is not the level of interest rates that is impacting sales. If that were true, then June followed by July and August of 2022 would have been the largest sale months.
 When rates remain fixed for a period of time, then buyers get more confident, and more sales occur. See March through May of 2023.
 The Sale-to-New List Ratio has remained in favour of Sellers since February, suggesting that few Sellers have been forced to sell because of financial need, and most are prepared to sit and wait.

Toronto Real Estate Market Report June 2023


RENTAL COMMENTARY

Our commentary is focused on just the Downtown and Humber Bay markets for rentals. The leasing and available units are basically unchanged in April from March at 2057 units leased. Activity in the rental market is over 3 times as busy as the sales market.
The good news for tenants is that rents also have plateaued.
With the construction activity downtown, many renters are giving up their cars. This month we looked at the cost of a parking spot. For a two-bedroom unit, the average rental increase for parking is $300 per month. Also 80% more units were leased with parking than without in the two-bedroom category. For investors, parking only becomes critical for larger units. But do the math. The breakeven cost for parking is about $60,000 max.

Toronto Real Estate Market Report 2023



Work with us

Victor Alvarez, Sales Representative

RE/MAX Condos Plus Corp. Brokerage

45 Harbour Square  Toronto,  ON  M5J 2G4 

Mobile: 647-223-0562

Phone: 416-203-6636

Fax: 416-203-1908

info@victoralvarezhomes.com

Get In Touch

Victor Alvarez, Sales Representative

Mobile: 647-223-0562

Phone: 416-203-6636

Fax: 416-203-1908

EMAIL

Office Info

RE/MAX Condos Plus Corp. Brokerage

45 Harbour Square  Toronto,  ON  M5J 2G4 

Stay Connected