December 2022 Market Update

12, 2022 - Market Analysis ARI

Looking Back at 2022 and Forward to 2023

We now can look back at 2022 and review what really happened.  Notable is the difference in number of transactions on the Toronto Regional Real Estate Board (TRREB) having dropped by approximately 46,500 from 2021 to 2022 (121,639 to 75,140).  It is important to remember that this decrease in number of transactions is coming off a record setting year in 2021.

December Market Update

Source of illustration TRREB/Financial Post

 

The stark differences between the number of transactions for Fall 2021 versus Fall 2022 is to be expected as Fall 2021 was the commencement of a period where buyer behaviour was very aggressive. As a result, we were seeing an excessive number of bids along with skyrocketing prices which eventually lead to a peak in February 2022.

Many of the headlines focus on year-over-year differences in average sale price in a given month.  While it is true that the average sale price on TRREB in December 2022 was 9.2% lower across the Greater Toronto Area (GTA) than that of December 2021 we like to focus on the entire year as a cumulative.  When stepping back and looking at the average price of properties that sold on TRREB in 2021 versus 2022 we note that there was an increase of 8.6%.

 

Looking forward to 2023, what we may see is a mirror image of 2022.  The front end of the year may be defined by lack of activity as both buyers and sellers navigate the unknown of interest rates, inflation and the impact of immigration.  It is expected that the interest rate announcement on January 25, 2023, will result in either a 25-basis point change or no change at all.  It is our belief that there will be no significant rate adjustments over the course of 2023 up or down bringing stability to the market and thereby comfort to both buyers and sellers so that the second half of the year will likely see increased transactions.

What is Happening with Sale Prices

Average sale price for all property types for the month of December dropped by 9.2% year-over-year to $1,051,216 in December 2022 from $1,157,837 in December 2021. Month-over-month we saw a -2.58% decrease from November 2022 to December 2022. On TRREB, for Toronto and the GTA, when broken down by product type and comparing December 2022 to December 2021 and November 2022 to December 2022, the average sale prices changes are as follows:

 

Sale Price Comparison
Product Type Changes from December 2021 to December 2022 Changes from November 2022 to December 2022
Toronto GTA Toronto GTA
Detached -4.1% -16.4% +4.3% -1.27%
Semi-Detached -13.8% -15.9% -2.94% +0.98%
Townhouse -11.9% -13.4% -11.67% -1.29%
Condominium +1.4% -5.2% +0.92% -2.34%

What trends are we seeing?

Overall price stability continues to be what we are seeing since July 2022.  The month over month change in average price has been nominal since July 2023.  The significantly reduced level of supply has been noted by many buyers considering a purchase at this time.  With the lack of inventory, it will be interesting to see which sellers have the confidence to place their properties on the market knowing that prices have increased from 2021 and that there are ready, willing and able buyers that currently have very little product to choose from.  This will dictate the length of time which we see the current market last before it transitions to a market we are more familiar with.

The Big Picture

February 2022 Peak to December 2022

February 2022 Peak to December 2022

Number of Transactions Trend

Number of Transactions Trend

When comparing December 2022 to December 2021, we saw the following trend:

Categories December 2022 December 2021 Percentage Change
Number of Transactions 3,117 6,013 -48.2%
Number of New Listings 4,074 5,177 -21.3%
Number of Active Listings 8,692 3,231 +169.0%
  • When comparing December 2022 to November 2022, we saw the following trend:
Categories December 2022 November 2022 Percentage Change
Number of Transactions 3,117 4,544 -31.4%
Number of New Listings 4,074 8,880 -54.1%
Number of Active Listings 8,692 11,910 -27.0%

 

Looking into the different geographic pockets of Toronto and the GTA we notice the following changes in number of transactions when comparing December 2022 to December 2021 and November 2022. The breakdown per area and product type are as follows:

Number of Transactions Comparison
Product Type Changes from December 2021 to December 2022 Changes from November 2022 to December 2022
Toronto GTA Toronto GTA
Detached -44.9% -44.2% -42.8% -31.2%
Semi-Detached -45.8% -55.3% -50.9% -28.6%
Townhouse -47.4% -46.3% -38.2% -30.5%
Condominium -55.3% -47.4% +28.1% -17.9%

Footnote: Source of statistical data is from the December and November 2022 Market Watch report of the Toronto Region Real Estate Board (TRREB) MLS.

December 2022 Market Update

A – Monthly Percentage Change in the Number of Units Sold

Monthly Percentage Change in the Number of Units Sold

B – Month Over Month Average Price Percentage Change

Month Over Month Average Price Percentage Change

C – Seasonally Adjusted Month Over Month Average Price Percentage Change

Seasonally Adjusted Month Over Month Average Price Percentage Change

D – Monthly Percentage Change in Average Sale Price

Monthly Percentage Change in Average Sale Price

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