July 2023: The Dog Days of Summer

The Toronto real estate market this July had a similar story as June did; home prices, home sales, and new listings were all positive compared to last year but sales have cooled slightly since last month. There are several factors behind this trend, none of which are all that surprising nor seriously concerning considering where we expect the market to be heading.

For context, this Spring marked the turning point for Toronto real estate coming out of the pandemic where we saw a considerable amount of new listings, record sales, and lots of bidding wars between buyers. Coming from this and heading into the warmer months, it’s only natural for demand to wane as people’s thoughts move off real estate and on to the good weather and summer vacations. This season is traditionally a slower period for home sales compared to the Spring and Fall and from what we’ve been seeing this year is no different, which is mostly to blame for prices being down slightly compared to April and May 2023.

There is concern of course among buyers about higher interest rates and the affordability of new mortgages, especially for first-time buyers; however, we are seeing that many would-be buyers have gotten used to the higher borrowing costs and have factored it in when making the decision to buy. Inflation and further interest rates hikes are still potential worries, but if the Bank of Canada can telegraph their decisions and not make any drastic changes prices should hold.

The month of August may echo the trends of June and July, but we anticipate September will be a strong start to the Fall. Those who didn’t sell this Spring and saw the record-breaking sales will be preparing to list, and potential buyers tired of paying Toronto rents may be encouraged by the short-term price declines. Now is a great time to buy as properties are staying on the market for longer and competition is down, but I wouldn’t wait too long because soon enough we expect the bidding wars to start again. If you’re thinking about selling, we suggest seriously considering to list come September or October when buyers are back from holidays and the market ramps up again.