GTA January 2023 Real Estate Market Update

By: Sylvia Smith

GTA January 2023 Real Estate Market Update



In 2022 many were predicting a housing market crash however, what we have experienced in the past 11 months is a healthier market correction. The Bank of Canada’s 8 consecutive rate increases resulted in many buyers deciding to place their decision to purchase a home on hold and many sellers also decided to delay selling their homes. On a year-over-year basis, both sales and prices are down markedly due to the impact of higher borrowing costs on home affordability.

We are however seeing that price drops are starting to plateau, the number of properties that sold in January is practically the same as the number of properties that sold in December there were actually only 17 fewer properties sold in January 2023 compared to December 2022. In the last couple of weeks in January there appeared to be a number of buyers coming back into the market as I noticed a marked increase in properties that sold and a number of these properties sold in bidding wars. Although not as aggressive as the bidding wars we experienced the first 2 months of 2022. Home selling prices appear to have received some support in the last several months due to a reduced number of new listings and the Bank of Canada announcing that interest rate hikes are likely on hold for the foreseeable future has prompted some buyers to move off the sidelines. Record population growth and tight labour market conditions will most likely continue to support housing demand moving forward.


January 2023 Real Estate Sales Update


The downward trend in real estate prices that we experienced in the spring and earlier summer markets has for the most part flattened out over the past 5 months. This is due to the number of listings also dropping off year-over-year. Although year-over-year prices are down 16.4% compared to January 2022, prices have remained relatively flat through the fall and into January 2023 when the average sale price in the GTA was $1,036,668, the number of new listings are down 3.7%, and the number of sales is down 44.6% compared to January 2022.



We have definitely experienced some significant price decreases over the past 11 months but if we compare January 2021 to January 2023 average sale price is still up 9.3%. In January 2021 the average sale price across the GTA was $966,068.


Home prices have absolutely declined over the past year as home buyers sought to mitigate the impact of the substantially higher mortgage costs. While once again in January 2023 the Bank of Canada overnight short-term interest rates increased by .25 basis points, lenders recently started to reduce the negotiated medium-term mortgage rates, like the five-year fixes rates, and have actually started to trend lower compared to the end of 2022. For the first time in a while mortgage rates are actually lower than the Bank of Canada overnight rate. This is a sign that lenders are expecting the Bank of Canada rate hikes to be coming to an end and for the trend to continue for a while which will further help housing affordability as we continue through 2023.


Great Opportunity for Buyers


The real estate market has definitely slowed down and my advice to buyers is to not try to time the market but rather to buy when the time is right financially for them.


The price decreases have started to flatten out. I caution buyers that are waiting to see if the prices drop further. Trying to time the market can be dangerous as by the time buyers realize that the market is not crashing it will be too late. It has been my opinion all along that the real estate market will not be crashing but rather that we have been going through a healthy correction – as the aggressive price increases were just not sustainable.


My advice to buyers and particularly first-time buyers is to buy what they can manage and continue to save and build equity rather than paying a landlord’s mortgage. If you are a first-time buyer or an investor it is a good time to get more active in looking for that perfect property.


Buy and sell your home or recreational property with Sylvia Smith. She specializes in residential and recreational real estate within the Greater Toronto Area, Parry Sound, and Muskoka. Whether you are a first-time buyer, an investor or you are looking for a cottage property, Sylvia Smith provides a seamless experience and is committed to making your real estate dreams come true. Combining her passion for real estate, and a tenacity for protecting client interests and providing integrity and client service sets her apart. Reach out if you have any questions or are thinking of buying and selling.