Toronto home sales fell to a 13-year low in 2023 as higher mortgage rates kept buyers away, according to year-end figures from the Toronto Regional Real Estate Board.
Only 65,982 homes changed hands over the past 12 months, down 12 per cent from a year earlier and 45.7 per cent below a peak in sales recorded in 2021.
Benchmark and average home prices both declined in 2023, with the benchmark falling 0.41 per cent to $1,067,200 and average prices dropping 5.4 per cent to $1,126,604.
Jason Mercer, TRREB’s chief market analyst, said a broader selection of homes on the market allowed buyers to negotiate lower prices in some cases.
But Tim Syrianos, principal broker of record and owner of Re/Max Ultimate Realty Inc., said the skittishness of sellers limited the extent to which prices came down in 2023.
“Those success stories are far and few in between because a lot of people (sellers) just did not want to participate,” he said.
Data out Wednesday showed Vancouver home sales dropped 10 per cent in 2023 from the year before and were almost 25 per cent below the 10-year average.
Home prices in the western city, however, defied expectations by ending the year in positive territory despite the highest borrowing costs in over a decade.
The benchmark home price in Vancouver in December was $1,168,700, down 1.4 per cent from November but up five per cent from December 2022.
As for Toronto market in 2024, Mercer said it could tighten if borrowing costs continue to drop.
Newly appointed TRREB president Jennifer Pearce was also cautiously optimistic about the year ahead.
“Borrowing costs are expected to trend lower in 2024,” Pearce said. “Lower mortgage rates coupled with a relatively resilient economy should see a rebound in home sales this year.”
On a month-over-month basis, average selling prices ticked up in December while the MLS Home Price Index Composite saw a marginal downturn.
On a seasonally adjusted monthly basis, sales were higher, while new listings declined for the third month in a row.
Syrianos, observing that this December marked the first seasonally typical market in three years, said the market exceeded his expectations.
“Make no mistake, it has been a tougher year, a lot of uncertainty but when you look at the first couple weeks of December, it definitely performed better than we anticipated,” he said.
Toronto realtor Cailey Heaps said she anticipates more homes will be available by late January and expects interest rates to drop early in the second quarter of 2024.
“I expect that we’ll start to see an increase in inventory by the third or fourth week of January and I think we’re going see an increase in demand within the next few weeks to a month or so, because I think a lot of buyers are going to want to get ahead of what is perceived to be upward pressure on pricing.”
Syrianos think buyers will remain hesitant.
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“There’ll be people starting to re-enter the marketplace trying to educate themselves to seeing if there is an opportunity in the market, but it won’t be a rush coming out of the gates,” he said.
He believes that the Bank of Canada will need to offer assurances that rate hikes are off the table to bring both buyers and sellers back into the game.
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