Real estate sales for 2023 in Toronto were the lowest they have been since 2002. Even through the COVID pandemic and the economic recession of 2008, more real estate sales were made in those years throughout the GTA than what happened this past year.

This may surprise a lot of sellers and buyers alike but when real estate sales are low, it could be a sign of several factors.

High Borrowing Costs

Interest rates are still comparatively high presently compared to where they were pre-pandemic. To receive a mortgage and purchase a home, a buyer has to come to the table with a higher income to cover the monthly payments to come.

Economic Conditions Are Uncertain

There is a lot happening in the economy right now that has left uncertain conditions. Inflation is still a concern. Instability in the real estate market in Toronto has not consistently established whether it’s an opportune time to buy or sell.

Then, there may be personal issues at play, such as job instability, income uncertainty, and similar financial influences preventing buyers from moving forward with a real estate purchase.

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Lack Of New Home Listings

Another reason for low real estate sales could be a lack of new home listings. If there aren’t enough properties on the market and homeowners are holding on to their properties for longer periods, fewer sales are bound to occur.

Increasing Demand In New Neighbourhoods

A trend happening in several GTA communities is an increased demand for an existing supply that is not growing. More buyers are looking at properties outside of the usual hot spots, resulting in an uptick in prices and a pricing-out of a class of buyers that would normally be interested in those same homes.

Therefore, what you end up with are neighbourhoods with heightened property values but few buyers prepared to meet these numbers.

Sellers Are Willing To Wait Longer

Sellers are not as motivated. They aren’t willing to lower their asking price or make concessions to current market conditions.

This results in more homes remaining unsold and sellers playing the waiting game, hoping to receive the offer they want as opposed to entertaining the opportunities that may be currently available to them.

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The Wrong Kind Of Real Estate Inventory

A lack of alignment between buyer and seller is also played out sometimes with the wrong kind of real estate inventory.

If a neighbourhood is filled with luxury homes for sale in Toronto, this requires a specific kind of buyer. Presently, affordable housing and condos are receiving more interest than homes due to their reduced asking price and advantages to first-time homebuyers looking to build equity.

Buyers And Sellers: Hesitation On All Sides

Ultimately, there is a lot of hesitation on behalf of buyers and sellers alike. Many sellers don’t want to list their properties or do and wish to wait for that ‘right offer’. Meanwhile, buyers are struggling with rising costs and an inability to find the best property for their needs.

When this happens, fewer transactions take place and a slowdown in real estate sales is inevitable.

Whether you are looking to buy or sell, allow us to find the right conditions for you and maximize the real estate transaction in your favour. Call us today at (416) 319-6893 or email us directly at info@adrianandrea.com to learn more.