When it comes to navigating headlines and making informed choices about the Toronto housing market, it’s hard to know what to focus on. That’s why we've created this space: to help you stay in the loop with what's happening in Toronto and GTA real estate. We update it often, so you can always come here for the most current stats, news, insights and more.
1. UNDERSTANDING THE MARKET
Toronto housing market: what you need to know right now
Transitioning into a busier fall
August is a traditionally slow month for real estate, and last month was no exception. Borrowing costs are high, inflation has made life more and more expensive, and the Bank of Canada's last few rate hikes have really done a number on confidence and affordability.
August saw 5% fewer sales year-over-year, despite 16% more new listings hitting the market. Higher borrowing costs mean buyers can afford less – or in many cases, can't afford to buy it all.
Investors have stepped back as well: even with record-breaking rental prices, current mortgage rates mean many landlords simply can't cover their costs, even when they’re charging market-rate rents.
But there is some good news: the Bank of Canada didn't raise the overnight rate this week. (Yay!) Instead, they're holding steady, which is certainly a promising development. Our agents are already seeing things ramping up after Labour Day, and the rate hold will only contribute to a healthier fall market.
Market Insights at a Glance
Got questions? Our agents have the answers: get in touch with one of our area experts anytime.
What's the difference between a buyers' and a sellers' market?
It all comes down to supply and demand – and who has the advantage in a sale, the buyers or the sellers.
What is a buyers' market?
It's when there are more properties for sale than there are interested buyers – when supply exceeds demand. There's less competition, prices drop, properties stay on the market longer, buyers can stipulate conditions, and sellers have to do a lot more in the way of marketing, staging etc. to attract buyers – and be willing to negotiate to make a sale happen.
There are those who will argue that we’re currently in a buyers’ market – though there are probably a lot of buyers out there who would disagree with that. But if you look at the situation right now, it does meet the criteria for a buyers’ market: there are more properties available than buyers who want to buy them. So what does that mean for you? Basically, if you have the means to buy in this high-interest-rate climate, or you don’t need to get a mortgage (e.g. you’re downsizing from a paid-off home), you’re at an advantage. Prices have softened, and sellers are negotiating and accepting conditional offers.
What is a sellers' market?
It's when there are more buyers than available properties. When supply is low, competition ramps up. Properties sell faster, for higher prices, and buyers are willing to do more (foregoing conditions, agreeing to shorter closing dates, offering more money and accepting properties “as is”) when they're competing with other bidders. There’s less opportunity for buyers to negotiate: the sellers are in control.
So what does all this mean to you?
I’m a buyer in a buyers' market. If you have the budget to buy and can qualify for a mortgage,the world is your oyster. Lots of selection, less competition, less pressure and plenty of good opportunities to be had. That said, if you LOVE something, you still need to move quickly. A great property is a great property, and it will get snapped up no matter what the market.
I’m a buyer in a sellers' market. You’ll need to jump on listings fast, expect to compete with multiple offers, and find ways to encourage the sellers to pick you over other bidders.
I’m a seller in a buyers' market. First off, don't panic. Don't sell if you don't have to, but if you do need to move, you can still get a good price by making your property stand out with great staging and marketing.
In this kind of market, properties take longer to sell – and sometimes may require a shift in strategy to get buyer attention – so it helps to be patient.
I’m a seller in a sellers' market. A good sales strategy will likely net you a great selling price without conditions. A great agent can really help you here by leveraging offers against each other and fighting hard for you.
A good agent is your best friend, no matter what the market
Ultimately your best bet is to work with a very seasoned REALTOR®, one who understands individual micro markets and can guide you through a smart move.
2. BUYING
Is now a good time to buy?
It’s hard to be a buyer right now. The stress test is at a tough-to-qualify-for high of 8%, making it more challenging than ever to get a loan. It’s no surprise a lot of buyers have decided to step back and wait for the market to soften further or interest rates to drop.
But. Because so many buyers are in “wait and see mode,” there are a lot more listings out there to choose from right now, and sellers are motivated. So if you have the means to pay current interest rates for a while, you could be in a very good position.
“When rates eventually come down – and they will!” says Sean Miller, Sales Representative at Property.ca Inc., “You will end up paying a lot less than if you had bought at a higher price with a lower initial interest rate. Remember, you can always do a short-term fixed-rate and refinance when rates come down – or stay variable and ride the wave, which seems to be a thing again.”
Sign up at condos.ca or property.ca today to get all the info you need to buy smart.
Is it better to buy or rent?
Most agents will always advise you to buy now if you can – and buy whatever you can. And here’s why:when you buy, you'r putting your money back into your own pocket and taking advantage of appreciation. But if you keep waiting so you can afford the “perfect” place, or renting while you try to time the market to get the best price, you’re handing money over to someone else instead of putting it towards equity.
If you’ve got enough for a down payment, even if it’s for something really small or in a location you don’t love, decent credit and a stable job, you’ll most likely be further ahead if you buy instead of renting.
Your first place doesn't have to be your forever home
Can’t afford a house? Buy a condo. Don’t have enough for a 2-bedroom? Get a 1-bedroom. If that’s still too much, go for a studio. And if a studio downtown is out of your reach, buy one in a less expensive neighborhood – or even in another city.
If it’s too small for you or not in a location you like, that’s ok. Stay in your rental or live with your family for a while: your renter will pay your mortgage as you build equity and let the property appreciate. It’s a formula that works, but it takes time.
Can’t afford to buy the home you want? Read this!
Still can't afford to buy something right now?
Talk to a mortgage broker about private financing
Buy with a partner
Everything you need to know about Canada’s Tax-Free First Home Savings Account
The Tax-Free First Home Savings Account (TFHA), which officially came into effect on April 3, 2023, is a great addition to your down payment saving arsenal. Here’s what you need to know:
You can contribute $8K a year – to a total of $40K per person.
You cannot have owned a property in the last 4 years
You can only use it to buy a place you’re going to live in
You can combine it with your First-Time Home Buyers Plan
And here’s the best part: unlike the First-Time Home Buyers’ Plan, which lets you borrow from your RRSP, you don’t have to pay it back. And you can combine the two programs to help you get to your goal faster.
This very comprehensive overview from the Department of Finance has everything you need to know about the TFHA.
Read more: Tax-free savings tools to help you buy your first home
Understanding value using sold data
Not sure what you should be offering for a property – or if it’s a good value? Looking at what properties have sold for recently will tell you everything you need to know about current value. Condos.ca and property.ca make that easy: simply toggle your search from “for sale” to “sold,” and you’ll find the sold prices for every property in the building and neighbourhood.
How to search sold data
Search filters help you compare apples to apples – if you’re looking at a 750 sf 2-bedroom downtown in a building with a pool, use filters to find similar properties, and voila! You’ll see what the place you’re interested in buying will potentially sell for. It’s easy to filter by time period, too: simply select what has sold in the last 7 or 14 days for the most current price data.
Read more: How looking at sold properties can help you make a winning offer
Inflation and interest rates 101
Want to know why the Bank of Canada has raised rates so many times – and what it could mean to your real estate goals? This section will help you understand overnight rates vs. bank rates, variable rates vs. fixed rates, and what they have to do with inflation.
Inflation basics
The inflation rate is a measure of how much prices for things like food, shelter and transportation go up over time. 2% a year is a healthy amount, but right now, we’re at about 3.3% which is certainly a whole lot better than the 8% high back in June 2022, but it's still not where the Bank of Canada wants us to be. Which is why they’re currently holding steady on rates rather than dropping them.
The pandemic is to blame, impacting global markets, causing supply chain issues, and changing the way people spend. Then there’s the war in Ukraine, which is causing massive uncertainty and wreaking havoc on the global economy. Prices have been going up so fast that our incomes can’t keep up.
The only way to slow inflation is to cut consumer spending – and that’s where the Bank of Canada interest rate hikes come in. Higher interest rates make it more expensive to borrow so people spend less, and make saving money more attractive by allowing higher earnings on investments.
As soon as inflation has gotten back to a healthy level, interest rates will start to come back down. However, experts predict that that won’t happen until late 2024 or early 2025 at the earliest.
All about interest rates
Overnight rate. The rate that’s set by the Bank of Canada. The current overnight rate is 4.25%. This is NOT the rate you’ll pay to borrow – it’s the rate banks use when lending money to each other.
Prime rate. This is based on the overnight rate and is the foundation for the rate banks charge consumers. Right now, the prime rate is 6.45%.
The actual interest rate you pay. The bank rate is based on the prime rate, but what you actually pay depends on the type of mortgage you get, your credit rating, and other factors.
Variable rate mortgage. This is a mortgage where you pay at the going interest rate. Your payments either fluctuate month to month based on the current rate – or they stay the same, but the amount that goes to interest and principal changes if the lending rate changes.
Fixed-rate mortgage. This is where you lock in at a certain rate for a specified amount of time. Your payments are predictable and you’re protected from rate hikes for the loan term, but your rate is higher than with a variable rate.
How can I help my kids buy?
Want to help your kids get into the market? You’re not alone. More and more parents are tapping into their own savings and equity to help their kids become homeowners.
1. Gift them the money. “It’s a great way to give them part of their inheritance now, tax-free,” says James Harrison of Mortgages.ca,. “If you can help them get to 20% down (or more), that will help significantly with buying power – and they won’t have to pay for SMHC insurance.”
2. Lend them the money. Be very clear about repayment terms. Having paperwork in place will be helpful if a couple splits up or they default on their repayment.
3. Co-sign or be a guarantor on their mortgage. Adding yourselves to the mortgage will give your kids more borrowing (and buying) power. However, if your kid defaults on the mortgage, your credit rating could take a hit – and you'll be on the hook for payments.
4. Buy a property together. This is a great option for parents who want to get their investment back when the home is sold. Whatever percentage you put in, that's what you'll get back at the end.
5. Buy the property yourselves, then transfer ownership later and pull out your equity. This is a great option for parents of students who are coming to the GTA to go to college or university. You can buy a place for them to live in while they're in school, then once they graduate and are working, they can take over the mortgage payments.
6. Let them live with you while they save their down payment. Offer up a free (or cheap) place to live. GTA rents are nuts, and not having to shell out $2,500 or more a month will add up fast.
Read more: 7 ways parents can help their kids become homeowners
3. SELLING
Is now a good time to sell?
It really depends on what you're selling. Really special properties or those in high-demand locations will always do well. But right now, it’s not exactly a sellers’ market. Homes are still selling, of course, but there’s a lot of inventory on the market, and buyer demand has cooled more with each interest rate hike.
For sellers, pricing and marketing are everything. Be realistic when you’re setting your price – otherwise your listing could just sit and get stale. Make your property as appealing as possible to buyers. And yes, that means spending money on staging. It makes a difference.
If you’re buying a new home, this may be a good time to sell first, then buy. You’ll know exactly how much money you have to work with – and will face a lot less pressure to unload your old property before you close on your new one.
Sign up at condos.ca or property.ca to find the data you need to sell with confidence.
Price, presentation, promotion: what sellers need to know right now
How do you sell successfully right now? Here’s what Todd Armstrong, Property.ca Inc. West GTA branch manager and Josh Benoliel, VP of Sales, have to say.
1. Price it right
“Before making any kind of pricing decision, get a handle on what’s going on in your neighbourhood,” says Todd. “If all the local listings are priced low with offer dates, that should be your strategy too. Because if everyone else is doing that and you list close to market value, buyers won’t bite. They don’t know what’s in your head – they’ll just assume your place is out of their range.”
On the other hand, if everyone in the building or area is pricing at market value, then that should be your approach too. And if it’s a mixed bag? Listen to your agent, and do what they recommend.
One thing to remember, though: underpricing a home does not guarantee a bidding war. Especially in this market. You could just end up getting offers that are way lower than what you want – or none at all. Only specific types of homes – unique, renovated, in great locations, with great views on high floors, etc. – tend to garner that kind of attention.
Read more: Everything you need to know about selling a property in Toronto and the GTA.
2. Focus on great presentation
“If you want to do well right now, your property needs to be a 10/10,” says Josh. “Buyers tend to gravitate towards the showcase-ready homes.”
Fix everything that needs to be fixed. Replace caulking, fix broken tiles, recaulk bathtubs, scrub light switches, replace loose door handles, patch the cracks in the driveway, weed the patio.
Make first impressions count. Buyers have 50% made up their minds as soon as they’ve walked in the door. Invest in making the exterior and the entryway as appealing as possible.
Brighten up the place! Todd recommends 3000 kelvin bulbs throughout to ensure paint colours appear true. Avoid blue LEDs or fluorescent lights – they make a room feel cold and antiseptic.
Stage it. Todd says every dollar spent on staging means the sellers get $3 back. It pays to help buyers envision the possibilities of living there.
Read more: 9 reasons your home isn’t selling
3. Promote the heck out of it
The more people see your listing, the better, so find an agent who will get it in front of as many eyes as possible. Todd’s top tip: work with a Property.ca Inc. agent – your listing will automatically be featured on condos.ca and/or property.ca, high-traffic sites that’ll get you amazing exposure. Also, hire an agent with a strong following on social, and focus on really great photos. If you’re selling a condo, don’t forget to include appealing pics of the building amenities. Read the full blog post here.
Want to see what properties in your area have sold for? Here’s how to search recently sold listings.
3. RENTING
Toronto's record-breaking rental market
It isn’t easy being a Toronto renter. In August, the average rent for a 1-bedroom in Toronto was $2,592. For a 2-bedroom, it’s $3,370 (data is taken from renters.ca). Roommate rentals are hitting new highs as well: in July, Toronto had the highest average asking rents for roommate rentals in the country at $1,296.
Rent continues to outpace the rate of inflation. And even though there are now more units available, competition remains fierce.
Get the scoop on the numbers in Renters.ca’s National Rent Report
Looking for a rental right now? 5 things to keep in mind
Competition for leases is fierce. But going in educated and prepared can help: here are some helpful insights to be aware of as you search.
1. You may face a bidding war. For a rental? Yep, it’s totally a thing now, especially for properties under $2,500.
2. It comes down to eliminating uncertainty for the landlord. Landlords don’t want risk. A letter of employment, your last few pay stubs, a credit report, and a completed OREA rental application will go a long way. Proof of your legal status in the country will also help reassure them. Some motivated renters have even been offering several months’ worth (up to a year!) of rent up front. Keep in mind that while it’s okay to accept this kind of payment if it’s offered, it’s NOT legal to request it.
3. Be ready to move fast on a unit you like. With stiff competition for rental units, you won’t have time to think it over or get your credit report done before submitting your offer. Have all your documents ready to go before you start looking, and you’ll be able to make quick decisions.
4. Some tenants are offering prepaid rent. Landlords aren’t legally allowed to ask for anything more than first and last months’ rent, but they can accept it if it’s offered. Just be careful: working with a REALTOR® will help protect you against scams.
5. Working with an agent gives you an edge. Real estate agents know how to present a client and structure an offer so the landlord will say yes. But even with a good agent, it’s competitive out there. Even great quality renters are being turned down right now.
Looking for a Toronto or GTA rental? Search properties for rent on condos.ca or property.ca to be matched with a lease specialist agent who will give you an edge over the competition and help you make a great move.
3 things investors should know about the Toronto rental market right now
If you’re thinking about buying an investment unit to rent out, here are a few things to keep in mind:
1. Rental units in most parts of the GTA are in hot demand. “There isn’t a lot of supply out there, and everything is getting rented,” says Julian Kashani, Broker. “There are more tenants than landlords, and available units are getting snapped up fast.”
2. You may get multiple offers for your property. The typical offer is around $25 to $100 more a month, sometimes with a quicker closing. However, some of our agents have been seeing multiple offers as high as $300 over asking, especially in high-demand neighbourhoods, where some have gotten up to 18 offers on a rental property.
3. Investors with variable-rate mortgages are getting hit hard. Many investors are facing skyrocketing costs and negative cash flow. Those with long-term tenants in units built before November 2018 are unable to raise rents due to rent control measures. And monthly mortgage payments have gone up so significantly that even those landlords who are able to rent at market rates aren’t getting all their costs covered. That could mean more investors will end up selling their properties rather than continuing to operate at a loss – especially those with tenants paying well below market rates.
Ready, set, RENT: the condos.ca rental process
Why do you need to have your credit check and letter of employment ready before going to see a rental unit? It’s a question our agents get asked a lot, and the answer is simple: it ensures you’ll go in knowing what you’re qualified to rent. Plus you won’t lose out on a great place you love because you don’t have all your paperwork ready.
Desirable condos are moving fast, and renting with really quick timeframes: if you have to wait for HR to get you a letter of employment, that cute unit with the great view will end up going to the renter with all their docs ready to go.
Here’s what you need before viewing properties
A completed rental application (your agent will provide the right one)
An employment letter that lists your position, salary and contact info for your manager/HR dept
Your credit score and report from Equifax or TransUnion
References (optional, but recommended)
Download: 5 steps to renting your next condo (one-page printable guide)
Once you’ve got all those docs in hand, you can start your search. But first, register for a condos.ca account (if you haven’t already). It will give you access to all the useful information on the site, and connect you with a Property.ca Inc. agent who can help you find a great place.
Found a listing that looks good? Go see it! Just schedule a time with your agent.
Looking for a rental in downtown Toronto? See what’s out there in your price range.