February 2023: Good News or Bad News?

You’d be forgiven for thinking it’s all bad news when it comes to Toronto real restate from what the headlines are saying; “One year after the housing peak, a record drop in prices…” from the Star and “Buyers and Sellers adjusting to new normal” in The Globe and Mail, but the headlines (and the big chart below) don’t tell the full story.

Prices throughout Toronto and the GTA have in fact dropped quite a bit from last year, down 17.9% overall and 18.1% for detached homes in Central Toronto. But this is no surprise when in February 2022 Toronto home prices were at their all-time high before the interest rate hikes cooled things down.

While it’s not positive that prices are down year-over-year, it’s not all bad news when we look at how much growth there’s been in Toronto real estate over the last five years, even in the midst of a pandemic. As shown in the chart below, compared to February 2019, 2020, and 2021 the average price of a home in 2023 is up 40.5%, 20.4%, and 4.9% respectively.

So, is this Good news or Bad news? It’s bad news if you bought a house last year and were hoping for a quick flip. However, for those that purchased their home a few years ago or have owned for some time now and are on a typical 5+ year investment plan, the news is probably good if not great.

Market Commentary by Joseph Robert, Broker of Record