2022: Toronto Real Estate Year in review

What happened in 2022?

The average selling price for properties in 2022 stood at a noteworthy $1,189,850, representing an uptick of 8.6% from the preceding year's average of $1,095,333.

This increase can be attributed to a robust beginning of the year, where prices exhibited considerable year-over-year growth. However, this momentum moderated as the year progressed and the Toronto housing market underwent a pronounced shift.

The delicate balancing act of affordability and supply was thrown off by interest rate hikes from the Bank of Canada, thereby leading to the marked adjustments in the housing market.

The increased borrowing costs in the housing market affected both buyers and sellers, leading to a decrease in housing transactions compared to the previous year. Potential buyers may have delayed their plans to purchase a home due to increased mortgage rates, while sellers may have hesitated to list their properties in a market with lower demand.

"While home sales and prices dominated the headlines in 2022, the supply of new listings continued to be an issue as well. The number of homes listed for sale in 2022 was down in comparison to 2021. This helps explain why selling prices have found some support in recent months. Lack of supply has also impacted the rental market. As renting has become more popular in this higher interest rate environment, tighter rental market conditions have translated into double-digit average rent increases," said TRREB Chief Market Analyst Jason Mercer.

This shift has required sellers to reassess their pricing strategy and become more flexible in order to compete in a market that is no longer as favourable to them as it was in the early months of 2022. On the other hand, buyers may have more bargaining power and be able to negotiate more favourable terms in their purchases.

My personal experience as a realtor aligns with the metrics, that it's not quite a sizzling hot market, but it's far from icy either. Like I mentioned last month, it's a sign that the market is finding its equilibrium. As always, buyers and sellers should keep an eye on the shifting market dynamics and adjust their strategies accordingly.

It'll be crucial to closely monitor interest rate developments and other economic indicators to gain a better understanding of the market's direction for 2023.

I'll be back in February to share my insights and observations with you in our next monthly market report.

If you have any questions or would like more information on market activity in your specific neighbourhood, don't hesitate to give me a shout at 416.856.1937 or by emailing me at Suzanne@suzannelewis.ca.