Market Update June 2023 | Demand For Home Ownership Is Stronger Than 2022

In June 2023, the Greater Toronto Area (GTA) experienced strong home sales and an increase in the average selling price compared to the previous year. Despite higher borrowing costs, the demand for ownership housing remained robust, with sales rising by 16.5% compared to June 2022. However, seasonally adjusted sales dipped on a month-over-month basis, likely due to uncertainty surrounding the Bank of Canada's outlook on inflation and interest rates.

One factor that affected the market was the persistent lack of inventory, which sidelined some potential buyers who couldn't find homes meeting their needs. The number of listings decreased by three per cent compared to the previous year, resulting in tighter market conditions.

The average selling price in the GTA rose by 3.2% to $1,182,120 compared to the previous year. Although the MLS® Home Price Index (HPI) Composite benchmark still showed a decline of 1.9% year-over-year, it was the lowest annual rate of decline in 2023. On a month-over-month basis, both the seasonally adjusted average price and the MLS® HPI Composite benchmark were up.

Factors contributing to the strong home sales included a resilient economy, a tight labor market, and record population growth. However, the GTA municipalities struggled to bring new housing online at a sufficient pace to keep up with the housing demand, leading to a deficit in the housing supply.

TRREB's Chief Market Analyst, Jason Mercer, pointed out that the Bank of Canada's interest rate decision and guidance on inflation and borrowing costs for the remainder of 2023 would be crucial in understanding the future trajectory of sales and prices.

Ishtiaq Ahmed
Broker of Record
Zown Realty Inc. Brokerage
http://zown.ca