A combination of record-high inflation post-COVID and rising interest rates have dampened buyers’ interest in buying homes in Toronto.

While, yes, the Toronto real estate market has continued on in the face of these challenges, there have also been some noticeable changes in who’s buying homes, how many homes are selling, which types of properties are selling, and the momentum of what’s out there in the market.

How permanent these changes in behavior are remains to be seen but what’s sure is that, in the present, the real estate market in the GTA, from South Etobicoke to North York and beyond, has been altered in a major way.

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Sales Across The Board Down

Home sales in Toronto are down year-over-year by 7-10% in most areas. This means fewer homes are trading hands than they were at this time last year. As interest rates have yet to come down and relief from inflation is not found by most people, there is less interest in Toronto real estate than in some time.

Price Appreciation Has Decelerated

The way in which Toronto has skyrocketing year-over-year price appreciations has slowed. There is still price appreciation occurring, however, it is not evenly applied across every region nor is it as steady or predictable as before.

More Buyers Waiting And Building Down-Payments

If you barely qualify right now for 5% of a down-payment, it’s advisable to wait and save. Many buyers are. To avoid the increased costs of private mortgage insurance, saving up to 20% is what many buyers are targeting, resulting in fewer buyers presently in the market.

In a challenging market, you need every advantage you can get to sell your home. The resources below will give you an edge:

Homes Staying On The Market Longer

Real estate is staying on the market longer than what we saw before the COVID-19 pandemic. This isn’t to say that these properties aren’t selling but that it’s simply taking a little bit longer. For sellers, this isn’t inherently bad news.

Influx Of Condos In The Real Estate Market

Due in part to rising interest rates and inflation, many condo investors have gotten out of this part of the real estate market. There has been an influx of GTA condos for sale into the market, arguably more supply presently than demand from those searching for investor properties. The result is a slight drop in condo prices.

Inventory Is Building Up Everywhere

As fewer home sales are occurring in Toronto, inventory is building up. Supply is increasing in various neighbourhoods. Its effect on demand and whether we are heading into a buyer’s market remains to be seen.

Mortgage Holders Feeling The Squeeze

While high interest rates and inflation are pricing out a lot of buyers, what’s also been occurring in the past two years is more mortgage holders struggling to keep up with the interest rates. This has forced the hands of some homeowners to sell their homes, create a rental unit from it, or seek out alternative means of keeping up.

It Feels Like A Recession

Based on the type and level of activity in the real estate market today, sales and activity are at a level only seen in prior recessions. In effect, the slowdown in Toronto market activity has the markers of any recession without the economy carrying those same markers.

Sellers Still Have The Advantages In Detached Housing

When it comes to detached housing, sellers still have the advantage. No one’s making more land in Toronto. It’s a highly valuable city, with many amazing neighbourhoods and reasons to live here. Detached housing remains in high demand.

Getting ready to sell your home? Learn more about our selling services right here.

It’s Still More Than Possible To Sell Or Buy A Home

Despite the drop in activity, sellers are still selling and there are still investors, buyers, and first-time homebuyers making moves. Areas such as South Etobicoke and others are still growing, offering excellent opportunities for both buyers and sellers.

Adrian + Andrea are the top real estate team in South Etobicoke. Even in this slowdown, we have helped homeowners trying to sell their houses to maximize their profits, buyers looking to find the perfect place to call home, and investors looking for the best rental unit. If you are a buyer or seller and aren’t sure about navigating the Toronto real estate market as-is, reach out! We’re here with the knowledge and resources to help.

Do you have more questions? Give us a call at (416) 319-6893 or email info@adrianandrea.com and we will be happy to help.