Your definitive guide to the Toronto & GTA housing market

Your definitive guide to the Toronto & GTA housing market

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. THE MARKET

Toronto housing market: what you need to know right now

Record rents and slowing sales

Things are looking pretty different right now than they did a year ago. July sales were down almost 50% over last year – and they dropped compared to last month, too. (Though the monthly decrease is to be expected…’tis the season, after all.) Average price, while definitely lower than the 2022 peak, was a shade (1.2%) higher than July 2021. 

While higher borrowing costs have discouraged many buyers, this is a temporary situation. As everyone adjusts to the reality of higher rates (which are still low compared to historic trends), we are confident more buyers will reenter the market. The current uncertainty isn’t permanent. The GTA will keep growing, and people will continue to need homes. 

Less expensive properties – including condos – are seeing more action than pricier property types: the rising costs of borrowing are driving demand to lower price points. Average selling price of GTA condos is up 12.2% year-over-year: they aren’t seeing the same kinds of price drops as other types of properties. 

The rental market is another story – records are being broken all over the place. The price of an average 1-bedroom unit is up 20% over last year at $2,269, and 2-beds are going for $2,979, a 15% jump. There are a third fewer listings out there than there were last year, which has put a dent in supply and is driving demand.

As always, however, remember that the averages we mention here are just that. Every part of the GTA is impacted differently – your Property.ca Inc. agent will have a deeper understanding of what’s happening in each pocket of the city.

Got questions? Our agents have the answers: get in touch with one of our area experts anytime.


2. BUYING & SELLING

Is now a good time to buy or sell?

Houses

If you’re thinking of selling right now, talk to an agent first. Certain neighbourhoods are still doing really well and seeing month-over-month price increases and a lot of competition. However, many are seeing declines – and way fewer interested buyers. 

Areas with lower-priced homes are seeing the biggest impact: buyers are likely to be borrowing a much higher percentage of the home’s selling price – so the higher interest rates are impacting their ability to buy, decreasing demand. Many areas in the 905 are also contending with a couple of other factors: lower demand (people want to live in the core again) and higher price jumps during the peak market mean prices are dropping faster.

But sellers in those areas shouldn’t necessarily panic, says Sean Miller, Sales Representative. “Selling a property may take a little longer, and you probably won’t get those magical numbers we were seeing a few months ago. but with a bit of patience and a good agent, you can still get a great price – depending on where and what you have to sell. I’m still selling properties for great numbers, it’s just taking a little longer. I recently sold a house in Woodbridge for a price my client was absolutely thrilled with.”

If you’re looking to buy a house right now, it’s a better situation for buyers than we’ve seen in a long time. There’s less competition, property prices are making their way back down to 2021 levels, and sellers aren’t necessarily holding out for super-high prices. The people who are choosing to sell their homes in this market are motivated – they either need to move or have already bought something else.

“I’m seeing lots of good deals in the market right now,” says Julian Kashani, Sales Representative. “Sellers who bought a few months ago now need to sell before taking possession of their new places. But I think those opportunities will last a few months at most. New sellers coming to market now are being advised to sell first and buy later…so there will be less urgency moving forward.” 

Condos

The fact that they’re priced more attractively than detached homes makes them popular – for many buyers, they’re the only viable entry point into the real estate market. Average selling price of GTA condos is up 12.2% year-over-year: they aren’t seeing the same kinds of price drops as other types of properties.

Selling a condo? Listing low and hoping to generate a bidding war with an offer date isn't the guaranteed sales strategy it was a few months ago. Our agents report that offer dates are coming and going without any bids more and more often. Again, it depends on the property and location, but working with an informed agent who really has their finger on the pulse of this fast-changing market is crucial to a successful sale.

Selling in a cooling market: 7 tips for success

As we shift out of a hot market, here’s what sellers can do to get buyers on board – and get the best possible price. 

“You can still sell for a good price,” says Property.ca Inc. agent Arvin Reyes. “But be prepared for fewer buyers, less competition and more offers under asking. Agents are using different strategies than they did at the height of the market.” 

Here’s what Arvin recommends if you want to put your best foot forward as a seller…

1. Adjust your expectations. 

For most areas, the days of multiple, way-over-asking offers are over. Talk to your agent to determine a price that will work for buyers – and for you. But be realistic: it probably won’t be what you could have gotten back in February. 

Read more: Just the stats: understanding property values with condos.ca data

2. Make your property super-appealing. 

While staging and presentation have always been important, they’re even more vital now that buyers have so many listings to choose from. Don’t cut corners here: professional staging with neutral colours and modern furnishings opens buyers’ eyes to the possibilities of a space. 

3. Market the heck out of it. 

Slick, professionally-shot photos, 3D tours and listing videos will get people’s attention online. But these days, you may need to do even more, like direct mail, newsletters to relevant buyers, printed feature sheets and more. 

4. Get feedback. 

When people come for viewings but don’t make an offer, ask your agent to contact them and find out why. That feedback will give you a better understanding of what buyers are looking for. 

5. Remember that you’re a buyer, too.

While you may get less for your home than you would have a few months ago when you sell, you’ll also probably pay less for what you buy – you won’t have to compete with dozens of other buyers and completely destroy your budget to get a place. 

6. Look at the big picture. 

Yes, prices have decreased over where they were a few months ago. But if you step back and look at values year-over-year, they are still higher. You’ll probably be able to sell for more than you could have this time last year. What we saw in early 2022 was a blip. Now we’re back to more reasonable – and more sustainable – price appreciation. 

7. If you’re selling, do it for the right reasons. 

“If your sole reason for wanting to sell right now is to make a killing, then this probably isn’t the best time,” says Arvin. “But if you need to sell, you can still do well. It just takes some patience and an agent with a good sales strategy that’s appropriate for the market.”
Want to see what properties in your area have sold for? Here’s how to search recently sold listings.

What's the difference between a buyers' and a sellers' market?

You’ve probably been hearing about Toronto moving from a sellers’ market to a buyers' market. But is that actually the case? And what do those terms really mean? In a nutshell, 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. 

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. 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. 

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. 

Remember: markets differ from neighbourhood to neighbourhood

Toronto is a series of micro markets that all behave very differently. Right now, there are some neighbourhoods in the 905 that are definitely in buyers' market territory, while sellers are still very much in control in other areas.

A good agent is your best friend, no matter 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.

Is it better to buy or rent?

Property.ca Inc. agent Sean Miller says buy now if you can – and buy whatever you can. If you buy, you’re 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, my answer will ALWAYS be don’t wait,” says Sean. “Buy something now!” 

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. 

Still can't afford to buy something right now?

  • Talk to a mortgage broker about private financing

  • Get a co-signer

  • Ask your family for help 

  • Buy with a partner

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

Sold data will tell you everything you need to know about property value

Not sure what you should be offering for a property – or asking for your home? Looking at what properties have sold for recently gives you a clear indication of 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

What rising interest rates mean for buyers and homeowners

All the recent rate hikes have definitely had a significant cooling effect on the market, with even more of an impact ahead. 

Read more: Bank of Canada hikes rate to 2.5%. Here’s what it means for you (CBC News)

So what do rising interest rates mean to you as a buyer or a homeowner? Should you lock in to a fixed-rate mortgage? How will the increases impact your payments – and your ability to buy?

According to James Harrison, Mortgage Broker at mortgages.ca, a .025% rate increase in the prime rate translates to about $60 a month on every $100,000 borrowed. So if you have a $500,000 mortgage, that’s an extra $300 a month. All 4 rate increases we’ve seen since March add up to 2.5% – about $180 a month for every $100K of mortgage. It definitely adds up.

If you’re thinking about locking into a fixed-rate mortgage to avoid big jumps, talk to a lender or mortgage broker before you decide: fixed-rate mortgages give you a more dependable amount every month, but they’re generally a full percentage point higher than variable or adjustable mortgages. You’ll end up paying a lot more than the variable rate while you wait for further increases. 

If you’re concerned about your monthly costs, but want to stick with a variable rate, most lenders have an option where your actual payments don’t change, but the amount that goes to the interest portion does. It will extend the length of time it takes to pay down your mortgage, but your monthly budget won’t be impacted. 

Also remember this: if you bought your property in the last few years, you probably had to pass a stress test, one that showed that you could still make payments based on a higher rate. This situation is exactly what the stress test is for. Talk to a mortgage broker to see what your best options are.

This MoneySense article is a great primer to help you understand why interest rates are rising – and how they could impact you.

3. PRE-CONSTRUCTION

Is pre-construction still a good investment? It really depends what kind of investor you are

Pre-construction units cost more per square foot than resale – a lot more. So are they actually a good investment? If you’re an investor who can wait 3-4 years to see a profit and doesn’t need cash flow right away, then yes.

Read more: Want to invest in pre-con? 5 things to keep in mind

The pros of pre-con investment

  • You don’t have to have the whole down payment up front: it’s spaced out over time.

  • No mortgage needed until the building is done. Unlike a resale, you don’t take out a mortgage until you close.

  • You can make a big profit – if you get in early.

  • You can sell before closing. This is how a lot of investors make money. They buy early, then sell the contract before occupancy in an assignment sale.

  • You don’t have to worry about rent control – anything built after November 2018 doesn’t have the same rules about rent increases as units built before that date.

  • You can rent it out during your occupancy period (the time between being able to live in a unit and actually owning it).

The cons of pre-con investment

  • Buying pre-construction is expensive – developers price based on how much a unit will be worth once it’s completed, not what it would be worth right now.

  • There’s no cash flow – if you need a renter to be covering your monthly costs from the outset, you’re better off investing in resale.

Read the full post here

4. RENTING

Toronto's rental market is on fire

While the resale market continues to cool, the rental market just keeps heating up, with prices heading skyward. In July, we saw some record-breaking numbers: the average rent for 1-bedroom units in the GTA is up a whopping 20% over last year at $2,269. The average 2-bed unit is going for $2,979. 

The reason for the price hikes is supply and demand. Immigration, students, and people moving back to the core are all impacting the rental market, and that’s what’s driving prices.

“It’s not easy for renters,” says Julian Kashani, Sales Representative. “While the overheated rental market is great for landlords, renters are getting hit hard, especially students and youth with lower budgets.”

Get the scoop on the numbers in Renters.ca’s National Rent Report

9 things you need to know about the Toronto rental market right now

If you’re on the hunt for a new place to live, or you’re thinking about buying an investment unit to rent out, here are 9 things to keep in mind: 

1. Demand is up. Supply? Not so much. “Everything is getting rented,” says Julian. “There are more tenants than landlords right now, and available units are getting snapped up fast.”

2. Expect bidding wars for rentals. For nice units in certain areas, get ready to face some stiff competition, and be prepared to offer more than the list price. Julian says the typical offer is typically around $25 to $100 more a month, sometimes with a quicker closing. Lately, however, some of our agents have been seeing multiple offers situations that result in rents that are as high as $300 more than list price – especially in high-demand neighbourhoods, where some have gotten as many as 18 offers on a rental property. 

Read more: 5 steps to renter success

3. Units with outdoor space are in hot demand. After a long pandemic, people want balconies and easy access to outdoor space. 

4. People want condos with WFH areas. Work from home is here to stay, and rentals with a quiet place to work are very popular. 

5. Amenities are important. Lounges where you can go and read or relax, rooftop gardens, pet-friendly buildings – those are all more important to renters than they ever have been before (hello, pandemic puppies!) 

6. Renters – 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. 

7. It pays to be open to alternative locations. You might be surprised at some areas that are a little further out, like Yonge and Sheppard or even Don Mills and Sheppard – they’re super-popular with renters because you get more square footage for less, but you’re still right on the subway line for an easy commute. 

Read more: Best neighbourhoods in Toronto for renters

8. Using an agent gives you an edge. In this market, there are a lot of benefits to working with a REALTOR® when you’re renting,” says Adam Hoffman, Sales Representative. “For one, it’s completely free for you: the landlord is the one who pays the agent’s commission. Plus, agents often have access to exclusive or soon-to-be-marketed rentals that aren’t being advertised yet – and they take a lot of the hassle out of finding a place, setting up viewings and dealing with landlords.”

9. This is a great time to be a landlord. Units are renting quickly, for peak rents, so despite higher interest rates, investors are more likely to be cash flow positive on their investments.

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.

Since the rental market is pretty much back to its pre-COVID hotness, there’s stiff competition for nice units (even bidding wars). 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

  1. A completed rental application (your agent will provide the right one)

  2. An employment letter that lists your position, salary and contact info for your manager/HR dept

  3. Your credit score and report from Equifax or TransUnion

  4. 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.

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