Toronto Real Estate Market Forecast 2023

Toronto Real Estate Market Forecast 2023

If you’re contemplating making moves on the Toronto real estate scene, it’s essential to understand where the market is headed. Read on for an analysis of the trends in the Toronto housing market. We’ll examine the latest data for the Greater Toronto Area (GTA) and make predictions about what to expect in the coming months.

Expect a rise in competition among buyers

The housing market in Toronto is forever in flux — it went through a phase of fast price escalation and strong demand but has since undergone significant shifts. Based on the latest market report from the Toronto Regional Real Estate Board, competition among real estate seekers in Toronto is increasing significantly month-over-month. Buyers are returning to the real estate market and moving to Toronto with optimism for the future. The demand for homes continues to increase, while the supply is consistently short in Toronto. In addition, lower inflation has led to lower borrowing costs and increased buyer turnout. Plus, Toronto’s population growth continues to spur sales and drive up demand, especially in the face of low inventory.

A closer look at the sales numbers

While sales are down year-over-year in the Greater Toronto Area, decreasing by 5.2% from April 2022 to April 2023, the month-to-month view tells a different story.

From March to April 2023, the number of sales increased, based both on actual and seasonally adjusted data. This trend has held consistent throughout 2023 thus far. January saw 3,100 sales, followed by 4,783 in February, 6,896 in March, and 7,531 in April 2023.

Within Toronto specifically, sales have also increased throughout the year. In January, there were 1,108 home sales throughout Toronto, followed by gradually increasing numbers month-by-month, reaching 2,735 sales in April 2023.

The Toronto housing market will stabilize

Expect to see a continuing return to stability away from volatility in the Toronto housing market this year, with interest rate hikes from the Bank of Canada paused, increasing buyer confidence in the housing market. This has coincided with what is occurring in the U.S. market, as well. Canada may see one more interest rate hike over the next few years, but the days of unpredictability will soon be relics of a bygone era in the housing market.

Average home prices

As of April 2023, the average price of homes in the Greater Toronto Area was $1.15 million, which was 7.8% lower than the year prior. This decline year-over-year is mainly due to increased mortgage rates in 2022, resulting in higher borrowing costs.

That said, the average price has still grown month-over-month throughout 2023, starting at $1.03 million in January. In addition, it’s also important to note that home values have risen significantly over the past few years. As of April 2020, the average price of homes in the Greater Toronto Area was just $821,000.


Regarding condos, the number of sales is down by approximately 43% throughout the Greater Toronto Area. Within Toronto, condo sales decreased from 5,396 in the first quarter of 2022 to just 2,961 in the first quarter of 2023. This fall can largely be attributed to the higher costs of borrowing. The average price of condos has also reduced by 11.4% year-over-year.

With that said, reports indicate that the housing market is expected to tighten throughout the Greater Toronto Area, with increasing condo sales and prices over the course of the rest of the year, according to a chief market analyst on the Toronto Regional Real Estate Board.

Watch out for a dynamic second half of the year

The real estate board in Toronto has predicted that home sales and prices in the Greater Toronto Area will increase during the second half of this year. The board also anticipates a rise in competition among prospective buyers.

Mercer predicts that Canada's plan to increase immigration in the following years will lead to a higher demand for housing, particularly in Toronto and its surrounding regions, where many real estate seekers are expected to settle. TRREB expects that there will be about 70,000 property sales in the 2023 market in total, with a strong performance expected in the second half of the year.

Investors are more likely to sell

Because mortgage rates remain high, and even though long-term rates are decreasing, investors may sell their properties due to the financial strain caused by the higher rates. Some investors may be experiencing losses due to the burden of high mortgage payments.

In Ontario, the rent increase limit for 2023 is 2.5%, making it difficult for many landlords to keep up with their mortgage payments. As a result, more listings may become available in the housing market as landlords who are unable to sustain their properties end up selling them. However, don't expect to see investment properties flooding the market. It's still a good time to be an investor if one can manage it financially, with demand predicted to increase while supply shows no sign of keeping up.

Toronto remains in a seller’s market

Homeowners and prospective homeowners may have noticed how much the Toronto real estate market has been shifting since the days of skyrocketing home prices and homes selling at lightning speed.

Lower demand for housing and fewer buyers in the market last year led many to speculate that the Toronto housing market was entering a buyer's market, but now, as demand is picking back up and buyers are re-entering the market, Toronto remains firmly in a stable seller’s market. Demand simply exceeds supply. Buyers can expect to have more leverage and time as they look for homes, but sellers still hold most of the bargaining chips.

Factors that will continue to affect the Toronto housing market

To keep track of Toronto's housing market, it's important to pay attention to macroeconomic factors like mortgage rates, inflation, and the job market. Set alerts for news related to these topics; when the economy is doing well, the housing market usually will be, too. Savvy real estate investors should look for a fall in mortgage rates, growing population levels, and a high employment rate for favourable conditions.

Build a life in Toronto

Toronto is a cutting-edge, world-class city sought for its job market and exciting atmosphere. It's understandable why anyone would want to move there, and more people are seeing the appeal. With the right agent by your side, you are sure to find your place. If your heart is set on moving to Toronto, contact the experts at Invidiata to get started on your journey.

*Header photo courtesy of Shutterstock


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