June 2023: Good News Heading Into the Summer

Now that we’re into July and the Canada Day long weekend has come and gone, it looks like we’ve reached the end of what was a very strong spring market where we saw prices in June surpass last year’s figures, despite being down slightly from last month.

The strong figures are being driven by a huge increase in demand from buyers, assisted by a lack of supply out there. Last month alone there were 16.5% more sales than the same period last year. The looming threat of an interest rate increase has tempered exuberance slightly but for the most part it seems buyers have gotten used to the idea of higher mortgage rates as long as they don’t move much more. Everyone will be paying attention to the Bank of Canada’s decision tomorrow that should signal where borrowing rates might be heading next.

Going into July and the summer season, we expect the market will cool down slightly as it inevitably does while people enjoy the weather and focus less on real estate. That being said, this could be a great time for buyers who have been observing from the sidelines to put in offers without as much competition. And for those thinking of selling, it appears that things are set for a strong September/October with a continuation of the upward sales trend we’ve experienced so far this year, so now may be the time to start preparing to list.

As you can see in the chart below, home prices in Toronto have still not matched the peak witnessed in February 2022 but they are nearing closer to it. Based on the positive figures the last few months, Royal LePage has even adjusted their 2023 forecast from slightly negative or flat to slightly positive on a year-over-year basis. If this holds true, there could be record sales again come 2024.

It’s impossible to know what comes next, but considering the very tight housing supply, expensive rental market, and influx of new people moving to Toronto every day, signs suggest the Toronto real estate market will continue improving.