Toronto Market Report
2023 Year-End Update
Toronto prices up 2% from year-end 2022 driven by the freehold segment; inventory remains historically high especially for condos in downtown core
In 2022, the Greater Toronto Area, like other real estate markets across the country, saw a significant decline in sales activity. Resale units sold were down 38% year-over-year and 21% when compared to the trailing 5-year average. The slowdown in activity continued throughout 2023, with units sold down a further 12% year-over-year. The Toronto Regional Real Estate Board (TRREB) compiles transaction data for each major market within the GTA, with the TRREB Market Stats dashboard providing historic sales data going back to 1996. While historical stats should never be the sole indicator of what’s to come, they are helpful to review and consider as part of the broader context. In this year-end update, we'll outline transaction highlights for each of the communities comprising the municipality of Toronto, as well as overall performance by property type.
GTA Regional Overview
Toronto is the largest city in Canada and the economic and entertainment hub of our country. It is one of our most livable cities, although high home prices continue to put it at a disadvantage to other world-class Canadian cities such as Montreal and Calgary. Nevertheless, with strong immigration levels into our country and a growing population, Toronto will continue to be a major destination.
Beyond the Toronto municipality, which is comprised of Toronto, Scarborough, and Etobicoke, TRREB covers the surrounding GTA regions of Orangeville, York, and Simcoe to the north, Halton and Peel to the west, and Durham to the east. In this report, we will focus on the core Toronto municipality, which is the largest region for overall sales activity in the GTA, representing 37% of all resales in 2023.
Toronto Municipality
Total Market Overview
Across all communities included in the municipality of Toronto, the average sale price observed in the final quarter of 2023 was just shy of $1.1 million, up 1.3% from the third quarter and up 2.0% year-over-year. Price growth was driven by strong performance from the freehold segment, with condos down slightly compared to a year ago. This marks a reversal from 2022, when condos outperformed freeholds on account of greater affordability.
Despite Toronto’s relatively good performance over the past year compared to the surrounding GTA, in the broader context, prices within Toronto proper have experienced less growth over the past 5 years than regions in the surrounding GTA like Pickering, Newmarket, and Brampton. This can be attributed to two things: (1) the relative affordability of these suburban markets surrounding Toronto, and (2) the pandemic’s impact on the need for more space at home. Compared to its average price 5 years ago, homes in Toronto proper are up 35.7%, while the entire GTA is up 39.5%. To compare Toronto’s performance against other major markets in the province, check out our article on Top Markets in Ontario here.
Going back further than 5 years, Toronto’s exceptional price growth has been driven by its low inventory, or housing supply available for buyers. When your market has lots of demand, you need to have lots of people selling or lots of new homes being built. Toronto has neither of these when compared to the overall demand to live in or nearby this city. Add in the fact than many neighbourhoods in downtown Toronto have limited space for new development, such as Liberty Village, and it is evident that housing affordability will continue to be a big issue for the city. Over the trailing 5 years, Toronto has been a tight sellers’ market, with an average of just under two months of resale inventory.
Starting in March 2022, multiple interest rate hikes resulted in a temporary cooling of the market, with Toronto ending the year with almost 3 months of resale inventory. After falling below 2 months during a strong spring market, back-to-back rate hikes in June and July have resulted in inventory more than doubling to end the year, with over 4 months of supply. As expected, homes are also taking longer to sell, with an average days on market of 26 days, up slightly from a year ago when resale properties were selling in 23 days. Over the last 5 years, Toronto has had an average of 18 days on market, so relatively speaking, this is a slightly more favourable market for buyers than what Torontonians have been used to, notwithstanding the drastically higher costs of homes and mortgage interest.
Around 60% of properties in the Toronto municipality are condominiums, with the remainder being freehold properties such as detached and semi-detached houses. Housing mix varies widely depending on location, with over 90% of properties sold in the downtown core being condos. Toronto condos are about half the price of their freehold counterparts, with average sale prices to end the year of $738K and $1,506K respectively.
To end the year, both property types are taking longer to sell than they were a year ago, with condos taking 7 days longer to sell than freeholds. The condo segment has also seen greater supply available for buyers, ending the year with over 5 months of inventory, up more than double the trailing 5-year average. Due to higher rates, expensive monthly condo fees are likely pushing many buyers (and sellers with variable rate mortgages) out of this market. Freeholds, on the other hand, saw a slight decline in inventory levels during the final quarter of the year, with much lower inventory at two and half months. With severely limited space available for the development of new freehold properties in the city, low inventory levels for freeholds will continue to be the norm. However, freehold supply is still higher than where it stood one year ago and over the last 5 years on average.
Community Overview
Downtown Toronto
Downtown Toronto is defined as the area south of Bloor, bounded by Etobicoke to the west and Scarborough to the east. The downtown core is further separated into its east and west districts by Yonge Street, the primary thoroughfare that runs north-south through the city.
Community Overview
Downtown West
Downtown West, defined by TRREB as the C01 community, is one of the most vibrant areas of the city. Downtown West is close to fully developed, with over 91% of resale activity over the last twelve months pertaining to condominiums. In recent years, and accelerating now, the area has undergone significant housing intensification efforts through the development of various high-rise condos, such as those in the mixed-use “Well” development near Spadina and Front. This will add some additional supply to the market, but if demand grows as expected, low inventory levels will likely be the norm.
Similar to the city as a whole, condos in Downtown West are about half the price of their freehold counterparts, down 7% from the third quarter to finish the year with an average sale price of $755K. Compared to a year ago, condos in Downtown West are down 8%, with substantial inventory coming to market in the latter half of 2023. At over 6 months of resale condos currently listed, buyers interested in this market have triple the available units to choose from, limiting competition and resulting in longer sale times and lower prices.
Community Overview
Downtown East
Downtown East, defined by TRREB as the C08 community, is one of the oldest and most historic parts of our country. In terms of land area and overall sales activity, it is about half the size of Downtown West with a similar housing mix that is dominated by condos. Compared to Downtown West, condos in Downtown East are typically older, more spacious, and less associated with high-rise building formats.
In the final quarter of 2023, Downtown East reported an average sale price of $765K, down 5.6% on the year and 4.0% when compared to the trailing 5-year average. Like Downtown West, inventory ballooned following June and July rate hikes, with almost 7 months of inventory available at year-end. These supply levels are 3 months higher than a year ago and 4.5 months higher than the trailing 5-year average. As expected from these high supply levels, properties in Downtown East are taking nearly a month to sell on average, almost 8 days longer than its 5-year average.
Community Overview
Midtown Toronto
Midtown Toronto is the largest region in the Toronto municipality in terms of overall sales activity. It is also the most expensive, with an average price to end 2023 of $1,416K. Midtown Toronto is bounded by Bloor Street to the south, Steeles Avenue along the northern municipal boundary, and Etobicoke and Scarborough to the west and east. Collectively, resale activity in Midtown is about 60% condos, with a drastic difference in average price between the two property types. Condos in Midtown are similar to the downtown core, ending the year with an average sale price of $837K. Freeholds, on the other hand, are dramatically more expensive, finishing the year with an average price of $2.3 million. Both condo and freehold prices in Midtown ended the year up slightly from where they were at the end of 2022. As a whole, Midtown experienced the highest annual price growth amongst the major regions in Toronto, up 7% when compared to year-end 2022. This marks the second year in a row Midtown has led Toronto proper for price growth, driven by strong prices in the freehold segment which is severely limited in terms of new supply.
To end the year, both property types in Midtown are taking a week longer to sell than they were a year ago, now close to one month on average. At 4 months of supply for both property types, inventory is also higher than it was a year prior and much higher than its trailing 5-year average, driven by many buyers on the sidelines on account of affordability challenges.
Community Overview
Etobicoke and the West End
Etobicoke and the West End, defined by TRREB as communities W01 thru W10, forms the entire western portion of the Toronto municipality, with overall resale activity more or less in line with Midtown Toronto. Collectively, Etobicoke's current housing mix is split equally between freeholds and condos, although condos will continue to grow in prominence.
To end the year, the average sale price in Etobicoke was just under one million dollars, down 1% on the year in aggregate. Similar to the rest of Toronto, freeholds in Etobicoke outperformed the condo segment over the past year, recording a slight year-over-year gain of 1%. Freeholds in Etobicoke ended the year at $1,290K, roughly twice the price of an Etobicoke condo which was down 1% on the year. Etobicoke inventory of both condos and freeholds grew in the final quarter of 2023, still well above their trailing 5-year averages. Properties in Etobicoke are also taking longer to sell, with condos taking 30 days on average and freeholds 23 days.
Community Overview
Scarborough and the East End
Scarborough and the East End, defined by TRREB as communities E01 through E11, forms the entire eastern portion of the Toronto municipality, with overall resale activity slightly less than Midtown Toronto and Etobicoke. Starting along the lakeshore, the region is bounded to the west by the Don Valley Parkway, while Victoria Park Avenue forms the remainder of its western boundary up to Steeles Avenue.
East of Victoria Park Avenue and towards the Pickering townline, Scarborough features a greater share of suburban neighbourhoods comprised of detached and semi-detached homes. Prominent neighbourhoods within East Scarborough include Cliffcrest, Woburn, and Agincourt. Collectively, Scarborough features the greatest share of freehold properties in the city, with only 38% of homes sold in 2023 relating to condominiums.
Historically and to this day, Scarborough is the most affordable region within Toronto, ending the year with average prices of $618K for condos and $1,171K for freeholds. Across all properties, the Scarborough average price was up 1.7% on the year, with growth concentrated in freeholds. As experienced city-wide, price declines in Scarborough were concentrated in condos, with double the supply when compared to freehold properties at year-end.
Scarborough inventory for both property types was unchanged in the final quarter of the year, ending the year with 2 and a half months of resale inventory. Supply is up from a year ago but relatively speaking, Scarborough continues to have the lowest supply of homes for sale across all properties. As expected from this low inventory, properties in Scarborough are currently selling faster than anywhere in the city, with Scarborough freeholds selling in just under 19 days, 6 days faster than Scarborough condos and 8 days faster than the municipal average across Etobicoke, Midtown, and Downtown.
Community Overview
Surrounding GTA
After outperforming in 2022, price growth in Toronto proper was back in line with the surrounding GTA, which also ended the year up 2%. The surrounding GTA experienced a more significant correction during 2022 and is still well below its pandemic peak for average sale prices. North of the Toronto municipal boundary at Steeles Avenue, York region consists of a variety of high-growth, expensive cities such as Markham, Richmond, Newmarket, and Aurora. Further north are the regions of Dufferin and Simcoe, which include the cities of Orangeville, Innisfil, and Bradford. York region ended the year with an average sale price of $1,286K, flat year-over-year, while Simcoe and Dufferin recovered from large price declines in 2022 with annual growth of 7.9% and 4.9% respectively.
To the west of Etobicoke, regions covered by TRREB include Peel and Halton. Peel region includes the cities of Brampton and Mississauga, while Halton includes the cities of Oakville, Milton, and Burlington. To end the 2023 year, Peel region recorded an average sale price of $1,045K, up 2.1% from a year ago, while Halton’s average sale price of $1,233K was up 3.5%. Finally, east of the Pickering-Scarborough townline, TRREB covers the Durham region, which includes the cities of Ajax, Pickering, Whitby, and Oshawa, amongst others. Durham region ended the year with an average sale price of $894K, flat year-over-year.
Archived Reports
Toronto Market Updates
Third Quarter 2023 Market Report
Second Quarter 2023 Market Report
Summary
The Toronto Market report will be updated on a quarterly basis. Every market is different, but understanding available inventory levels alongside recent price and market trends can help prospective buyers and sellers make more informed decisions. A summary of all Toronto markets as of year-end 2023 is presented above and you can subscribe to quarterly updates of the Toronto Market Report by completing the contact form below.
Thank you for taking the time to read this article. As you contemplate the next steps in your real estate journey, there are a variety of helpful online resources you can leverage, such as realtor.ca, the Canadian Mortgage and Housing Corporation, and historical sales data and market insights from leading real estate websites like Zolo, Royal LePage, HouseSigma, and Wahi.
