The average selling price in June 2023 was higher than June 2022, yet, that’s not the whole story. We’re still in a Seller’s Market throughout the GTA. In each of the cities we track, they all stayed tight. We’ve seen average days on the market get a little lower and months of inventory stay low as well.

Add to that whole mix, two interest rate increases by the Bank of Canada and we’re back into flux. The biggest change in interest rates actually didn’t happen in the variable rate market, it was in the fixed-rate mortgages. In the short term, this will drive a lot of the current active buyers to lock in a home at their lower approval rates. In the medium term, it will knock some buyers out of the market, as approval rates are sky-high, with the addition of the 2% stress test still being applied to mortgage approvals.

Where do I think the market is going? The numbers right now seem pretty clear. I think we’ll edge back into a balanced market on the seller’s side. This will lock in the increases that we’ve seen to date and prices will likely plateau. This is a good thing. A little bit of time to breathe. The only uncertainty has to do with how many new permanent residents are being approved right now. In 2022 we saw 500,000 new people move to Ontario. If we have numbers like that again in 2023, you can look for upward pressure on home prices and rents to continue. Although at a slower pace.

Fundamentally, we still have a lot of buyers and not many sellers. I don’t see the inventory of listings rising too much. People with low fixed rates are holding on to those rates until renewal time to maximize their savings. At renewal time, they’ll have to take on the new rates and it’s at that time that they’ll be willing to make a move.

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