February 2022 Review
With the amount of home sales in February 2022 down compared to the all-time record set in February 2021, there is an indication that the market conditions could be changing. With that being said, competition remains high and is still the primary driver with respect to price escalation in Toronto and the Greater Toronto Area (GTA). According to the Toronto Regional Real Estate Board (TRREB), February saw the following changes:
|Categories||February 2022||February 2021||Percentage Change|
|Number of Transactions||9,097||10,929||-16.8%|
|Number of New Listings||14,147||15,146||-6.6%|
|Number of Active Listings||6,985||8,727||-20.0%|
Number of Transactions Breakdown
As we breakdown the number of sold transactions respective to their product type, we can see the market movement has gone down across the board throughout Toronto and the GTA.
Increasing Sale Prices
As the trend continues with the decline of new and active listings on the market year-over-year, prices continued to rise in February 2022. When we unpack the sale prices of different product type, we can see how each segment contributes to the increase of the overall average sale price in Toronto and the GTA from $1,044,957 in February 2021 to $1,334,544 in 2022.
What trends are we seeing?
With the spring market right around the corner, more sellers are inclined to put their properties up for sale in the warmer months. If there’s any indication as to how this will affect the real estate market, new listings from January 2022 totaling 7,979 increased to 14,147 in February 2022 and we still saw a considerable rise of $91,751 in average sale price. This illustrates the immense demand shown by buyers in Toronto and the GTA. Price escalation will only slow with respect to how much it increases during the upcoming months, and more likely to taper off rather than to experience a dip. Buyer opportunity could be around the corner whether you are thinking of investing, helping a family member to enter the real estate market, or purchasing for self use. When navigating through a changing real estate market, it is highly recommended that to maximize the opportunities presented one works with a real estate professional with a proven track record. Let us show you how our 35 plus years of expertise can benefit you! We can be reached at 905-737-6060.
What’s currently Affecting the Market?
The ongoing Russian/Ukraine conflict has raised some concerns as to how it will affect the Toronto Real Estate Market. To give you an example, the day the news of the conflict broke our team had an offer review night set for the same day. We experienced a slight pause in activity where no offers were submitted; but, 4 days later the property sold for the expected value with multiple offers. Further out, the transfer of wealth to Canada from refugees seeking asylum will add to our already competitive buyer pool and continue to keep the real estate market healthy.
Recently, the Bank of Canada raised federal interest rate from 0.25% to 0.5%. Although effort has been made to mitigate the rise of inflation and housing prices, this factor does little to rein in on the soaring prices. The following passage provides an example of how it’ll affect homeowners and prospective buyers.
“Using the example of a five-year variable mortgage with a rate of 1.25 per cent, a down payment of 10 per cent and an amortization period of 25 years on a home that costs $748,500, the mortgage payment amounts to $2,696. After an increase of just 0.25 per cent in the mortgage rate, the total payment rises to $2,776, a difference of $80. This amounts to an increase of $960 per year, according to data from RateHub.ca.” (https://www.ctvnews.ca/business/how-interest-rate-hikes-could-affect-your-mortgage-payment-1.5762554)
Footnote: Source of statistical data is from the January 2022 Market Watch report of the Toronto Region Real Estate Board (TRREB) MLS.
A – Monthly Percentage Change in the Number of Units Sold
B – Month Over Month Average Price Percentage Change
C – Seasonally Adjusted Month Over Month Average Price Percentage Change
D – Monthly Percentage Change in Average Sale Price