March 2022 was a pivotal month in Canadian real estate. For the first time in nearly a year and a half, the central bank’s benchmark interest rate rose — the first of eight increases over the 12 months that followed — resulting in a major shift from an ultra-competitive seller’s market to a much slower-moving buyer’s market.
A lot has happened in the year since.
We’ve seen home prices fall, mortgage payments become more of a strain on property owners, would-be sellers reluctant to list their homes, and house hunters holding off on their search for lack of inventory. But in March 2023, a full year following that first rate hike, our team saw the market start to turn back around — an observation supported by the latest data from the Toronto Regional Real Estate Board (TRREB).
Here’s what’s been happening in the Central Toronto area over the past month — and what that means for buyers and sellers:
Home sales are on the rise — a signal of positive buyer sentiment.
The end of winter typically signals the beginning of real estate’s busiest season and this year is no exception.
The spring market has gotten off to a strong start, with the number of home sales in Central Toronto having gone up over 33% compared to the month prior.
Condos saw the biggest boost in sales volume during this period — up nearly 50% from February, while semi-detached homes saw the smallest increase — up 18%.
“Home sales have shifted several times over the past year, but they’ve been on an upward trajectory for a while now, a sign of increased consumer confidence in the Toronto market,” said Cailey Heaps, President & CEO of The Heaps Estrin Team.
Meanwhile, prices have stayed relatively stable — except in the detached homes market, where they’re up.
For the first time in a year, the Bank of Canada opted not to increase its benchmark interest rate at a previously scheduled announcement on March 8, 2023, one of many recent signals that the market is stabilizing.
Another sign? The fact that home prices haven’t dramatically shifted during the past month.
The average price of a Central Toronto condo is currently sitting at $786,694 — a mere 0.10% less than last month, while semi-detached homes are selling for $1,551,106 — a 1.13% decrease. Detached home prices have continued to rise, however, up from $2,417,752 in February to $2,510,244 in March — an increase of $92,492 or 3.83%.
“Despite the fact that prices are down on average, the recent increase in home sales — many of which have had multiple offers and been decided by bidding wars — suggests that prices will be driven up by buyer demand,” Heaps continued. “And because Central Toronto is lacking inventory, homes are selling fast.”
Fewer days on market is fueling seller sentiment.
Many would-be sellers have been hesitant to list their properties over the past few months, worried that the effects of the interest rate hikes would lead to slow sales and less attractive offers. But as the market warms up in tandem with the weather, more of these sellers are considering entering the market.
Another reason for this shift in sentiment? Buyer competition is back.
Homes were selling significantly faster in March than February — 29% faster, on average. Plus, according to TRREB, last month the average home’s selling price surpassed the average list price for the first time since May 2022. And this competition exists in the entry, mid-level and luxury markets alike.
Check out some of our most recent sales below to see how we successfully helped clients sell for over asking in March:
- 148 Bessborough Drive – Sold for 13% above asking price
- 76 Airdrie Road – Sold for 5% above asking price in 2 days
- 14 Forsyth Crescent – Sold for 23% above asking price in 6 days
- 108 Ridge Drive – Sold for 9% above asking price in 1 day
- 75 Portland Street, Unit #915 – Sold for 5% above asking price in 2 days