Real Estate Market December 2023

06 Jan Real Estate Market December 2023

Your December 2023 real estate market update is here! Covering Toronto, Oakville, Burlington, Hamilton and the surrounding areas.

Highlights of the real estate market from TREBB and RAHB

While the overall demand for housing remained buoyed by record immigration in 2023, more of this demand was pointed at the rental market. The number of Greater Toronto Area (GTA) home sales in 2023 came in at less than 70,000 due to affordability issues brought about by high mortgage rates. “High borrowing costs coupled with unrealistic federal mortgage qualification standards resulted in an unaffordable home ownership market for many households in 2023. With that said, relief seems to be on the horizon. Borrowing costs are expected to trend lower in 2024. Lower mortgage rates coupled with a relatively resilient economy should see a rebound in home sales this year,” said new Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce.

There were 65,982 home sales reported through TRREB’s MLS® System in 2023 – a 12.1% dip compared to 2022. Despite an uptick during the spring and summer, the number of new listings also declined in 2023. The trend for listings has been largely flat-to-down over the past decade, which is problematic in the face of a steadily growing population.

On a seasonally adjusted monthly basis, sales increased compared to November, while new listings declined for the third straight month. The average selling price for all home types in 2023 was $1,126,604, representing a 5.4% decline compared to 2022. On a seasonally adjusted monthly basis, the average selling price edged higher, while the MLS® Home Price Index Composite edged lower.

“Buyers who were active in the market benefitted from more choice throughout 2023. This allowed many of these buyers to negotiate lower selling prices, alleviating some of the impact of higher borrowing costs. Assuming borrowing costs trend lower this year, look for tighter market conditions to prompt renewed price growth in the months ahead,” said TRREB Chief Market Analyst Jason Mercer. “Record immigration into the GTA in the coming years will require a corresponding increase in the number of homes available to rent or purchase. People need to have comfort in knowing that they can plan their lives and future with the certainty that they will have the stability of an affordable place to live,” said TRREB CEO John DiMichele.

For the second year in a row, the REALTORS® Association of Hamilton-Burlington (RAHB) reported a decline in residential sales. In 2023, sales were 11% lower than the previous year and nearly 30% below long-term trends for the region. “Lending rates have not been at these levels in two decades, which is weighing on housing demand. What we saw in 2023 is that higher-priced detached and semi-detached properties were the primary drivers of sales declines. Sales improved for homes priced below $600,000, but this range only represents 20% of supply,” says Nicolas von Bredow, President of RAHB.

Inventory levels generally trended up throughout 2023. In the first half of the year, the pullback in new listings relative to sales prevented a rapid acceleration in inventory levels, keeping market conditions relatively tight. However, by the second half of the year, we started to see an uptick in new listings, causing the sales to new listings ratio to fall, driving steeper inventory gains and causing the months of supply to push above four months.

Tighter conditions earlier in the year caused prices to trend up over the levels reported at the end of 2022. However, as supply increased in the latter half of 2023, we saw downward pressure on home prices. The average benchmark price fell by nearly 9% over the previous year erasing much of the gains reported in 2022. However, prices remain consistent with 2021 levels and are well above pre-pandemic.

Questions about buying or selling? Reach out anytime, I’d be happy to discuss the market with you!

All the latest home prices and statistics by property type and city below!

Sources for Real Estate Market Update for December 2023 : Toronto Regional Real Estate Board and REALTORS® Association of Hamilton-Burlington