Toronto Housing Market Report
- The average home sold price in the Greater Toronto Area (GTA) decreased 18% year-over-year to $1,095,617 for February 2023.
- Inventory shortage in the GTA housing market allowed a whopping 5.5% jump in average home prices. Yet over the medium and long term, legal changes in Ontario should prevent another bubble, as we saw between January and April 2022.
- Detached home average price decreased by 19.9% year-over-year to $1.44M.
- Semi-detached home average price decreased by 21.3% year-over-year to $1.07M.
- Freehold townhouse average price decreased by 16.3% year-over-year to $1.05M.
- Condo apartment average price decreased by 11.8% year-over-year to $705k.
Greater Toronto Area (GTA) Housing Market Overview
The Greater Toronto Area (GTA) saw a 5.5% monthly jump, with the average GTA home price in February 2023 reaching $1,095,617. This means that the GTA housing market has seen an 18% decrease in prices year-over-year, a significant dip for homeowners as they weather through high mortgage rates and an increasing cost of living.
There were 4,783 home sales in the Toronto housing market during February 2023, a 47% decrease from the 9,097 sales in February 2022. Yet it is 54% higher than 3,100 sales during January 2023. The main reason for this annual decline in market activity is that in 2022, prime rates soared from 2.45% to 6.45%, signifying the increased cost of borrowing for potential homebuyers.
The composite benchmark home price, which measures the price of an “average” home, registered its first increase since last spring’s price peak. The GTA’s benchmark home price for February 2023 was $1,091,300 representing an 18% yearly decline but a 1.1% monthly increase.
The City of Toronto's average price of $1,071,043 for February 2023 increased by 8.4% compared to last month’s $987,842. That’s a decrease of 12% year-over-year. However, other cities within the GTA housing market experienced more significant changes in home prices. Brampton’s average home price has been battered with a 24% annual decrease to $1,028,192, while the neighbouring Mississauga’s housing market saw an 18% price decline to $1,009,803.
Home prices in York Region, which includes Markham, Vaughan, and Richmond Hill, have declined 18% year-over-year to $1,302,720. Halton Region, which includes Burlington, Oakville, and Milton, has seen a 20% year-over-year decrease in home prices to $1,222,095. Out in Durham Region, Oshawa’s housing market has seen a 30% decrease in prices year-over-year to $767,034.
Looking again at the Greater Toronto Area, all property types are experiencing significant year-over-year decreases in average prices, even though they are seeing an increase in average prices compared to last month. That’s because last year’s prices increased significantly before they peaked in the spring of 2022.
The average price of a detached home in the GTA was $1,439,735 in February 2023, a 20% decrease year-over-year but a monthly increase of 7.3%. For semi-detached houses, the average price was $1,069,266, down 21% year-over-year but up 4.9% monthly.
The average price of townhouses was $934,834, down 17% year-over-year but up 5.3% MoM. For apartments, the average price was $705,472, down 12% year-over-year but up 2.6% monthly.
One reason for the slowdown in Toronto’s housing market stems from higher borrowing costs due to the Bank of Canada rate hikes, as higher mortgage rates reduce home affordability. These rate hikes have been due to high inflation in Canada and have significantly impacted housing markets across Canada.
The Bank of Canada has decided to pause its policy rate hike, which has led some people to assume that the bank may cut rates in the future and reinflate the housing bubble. To determine the validity of this assumption, it's essential to understand the root cause of the housing bubble in the first place.
From a technological standpoint, there are few limitations to building houses closer together or on top of one another. Therefore, in a free-market economy, the price of a home should be determined by its marginal cost of production, similar to any other commodity. However, in local elections, current homeowners often have higher participation rates compared to potential future homeowners
Zoning policies that limit the density of housing development often benefit current homeowners during municipal and city council elections, but they can also cause home prices to behave more like works of art than everyday goods. This policy increases the wealth of current homeowners at the expense of future and potential homebuyers.
The price of an asset with limited supply is determined by the supply of money available to potential buyers rather than its marginal cost of production. In southern Ontario, the policy of financial repression, which imposed artificially low interest rates between 2008 and 2022, contributed to the formation of the housing bubble.
However, Ontario's Bill 23 limits municipalities' power to restrict private property rights. Without such restrictions, any housing bubble would result in the overproduction of houses, making the housing market self-regulatory, like the commodity market. Thus, even a return to free money might not be able to inflate another housing bubble in Ontario.
Home Prices in Toronto
Greater Toronto Area Housing Market Statistics for All Property Types
Average Sold Price and MLS HPI Benchmark Price
Total Transactions
Property Type Distribution
Free Home Value Estimator
Detached HouseHousing Markets Across Canada
Market Overview for Detached Homes
Average Sold Price
Transactions
Market Overview for Semi-Detached Homes
Average Sold Price
Transactions
Market Overview for Freehold Townhouses
Average Sold Price
Transactions
Market Overview for Condo Apartments
Average Sold Price
Transactions
Greater Toronto Area (GTA) Breakdown by Region
Glossary and Definitions
MLS® HPI: The MLS® Home Price Index (HPI) is an index by the Canadian Real Estate Association (CREA) that tracks the prices of homes in a neighborhood. It allows Canadians to quickly compare home prices across Canada and between periods of time without having to account for specific features of a property. Unlike market prices, which can fluctuate from month to month based on seasonal dynamics, the HPI provides a stable view tracks trends across a longer period of time. The HPI is reviewed every year in May to adjust for changes in the real estate marketplace.
MLS® HPI Benchmark Price: The MLS® Home Price Index (HPI) Benchmark Price is the HPI translated into a real-world price number.
Strata Insurance: Strata insurance is insurance used by a strata like a condominium to covers damages to common areas and assets and liability to the strata. It can also include fixtures built or installed as part of the original construction of each unit, even though these may not be common structures. The insurance can cover:
- Buildings and structures associated with the strata including common areas such as the roof, parking garages, driveways, gyms, pools, etc.
- Liability for any property damage or bodily injury suffered on strata property
- Any fixtures that are part of the "standard unit" or original construction of each unit
Strata insurance does not usually include personal items and appliances that are part of a condo unit. It also does not cover the damages made by individual unit owners, such as in the case of water damage caused by a unit owner. These are usually covered by personal condo insurance.
Property types
Detached home: A detached home is your standard single-family home. It is a residential building that stands alone and is separately titled or legally a single unit.
Semi-detached home: A semi-detached home is similar to a detached home, except it shares a wall with another home. This pair of homes must make up an independent building and each should be separately titled or legally two separate units. There can only be two homes in a semi-detached building.
Townhouses: A townhouse is the middle between a detached/semi-detached home and a condo apartment. Like detached and semi-detached homes, they are often single-family units that have their own land and may be attached to other units. However, like condo apartments, they typically have to pay co-ownership fees for maintenance and may share some common features with their neighbors.
Condo apartment: This category includes all apartments and condominiums. These are complexes of residential units with common areas such as hallways, parking lots, stairwells, etc. They can be low-rise, mid-rise, or high-rise buildings. Unlike townhouses, there are no parts of the lot (the land of the building) where access is reserved for only one owner or occupant. There can be privately owned units and spaces inside the building.
Plexes are multi-story buildings with two to four individual units, usually one on each floor. They are a mainstay in Montreal and other cities in Quebec. Each unit is usually individually accessible via an external entrance with higher floors connected by staircases.
Property Classes
Freeholds: A freehold is any property where the owner owns both the house and the land it is built on. Common freehold property types include: detached, semi-detached, some townhouses, and farmland.
Condominiums: A condominium or condo is any property where the owner owns the home (or unit) but shares ownership of the land and other improvements with a condominium corporation. Common condominium property types include condo apartments and some townhouses.
Leasehold: Leasehold describes the situation where different entities own the land and the structure built on the land. Owner of the buildings has leased the land and pay rent to their landlord while owning the building on the land.
Housing Markets Across Canada
Data sourced from the Toronto Regional Real Estate Board (TRREB) and the Canadian Real Estate Association (CREA). Any analysis or commentary is the opinion of the analysts at WOWA.ca and should not be construed as investment advice. Please consult a licensed real estate professional before making a real estate investment decision. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.