Toronto Market Report
2023 First Quarter Update
An overview of historical transaction data in the municipality of Toronto
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 market slowdown continued during the first quarter of 2023, with units sold down 43% when compared to the record quarter one year earlier. 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 first quarter 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 close to 37% of all resales in 2022.
Toronto Municipality
Total Market Overview
Across all communities included in the municipality of Toronto, the average sale price observed in the first quarter of 2023 was just over $1 million, largely unchanged from the prior quarter but down 11.4% when compared to the record quarter one year earlier. This compares favorably to the surrounding GTA, which is down 18.5% year over year. This is a reversal from what occurred during the pandemic, when many people made the move out of the city for greater space and affordability offered by suburban markets in the surrounding GTA. During 2022 and through the start of the new year, demand has been more resilient in the core Toronto municipality.
Despite Toronto’s relative outperformance since 2022 compared to the surrounding GTA (and province) as a whole, 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. 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.
Throughout 2022, multiple interest rate hikes resulted in a temporary cooling of the market, with Toronto ending the year with almost 3 months of available inventory, up slightly from where it’s been since 2017. Inventory fell to 2.3 months during the first quarter of the new year, with average days on market unchanged at 23 days. Compared to the record quarter one year ago, when properties were selling in 11 days and inventory was critically low at under 1 month of supply, the market is more balanced although buyers now have to struggle with higher interest rates and the associated affordability challenges.
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 in the first quarter of $737K and $1,547K respectively. Despite the relative affordability, latest data shows that Toronto condos have seen prices grow at a slower pace than the freehold segment over the past 5 years. This recent change is likely attributable to the higher interest rate environment which, when coupled with monthly condo fees, is drastically more challenging on household budgets when compared to years prior.
To end the first quarter, both property types are taking longer to sell than they were a year ago, with condos taking 5 days longer to sell than freeholds. The condo segment continues to see greater inventory levels available for buyers, although inventory fell for both property types in the first quarter. Freehold inventory now sits at 1.8 months, more or less in line with the trailing 5-year average. With severely limited space available for the development of new freehold properties in the city, low inventory levels for freeholds should continue to be the norm.
Community Overview
Downtown Toronto
Downtown Toronto is defined as the area south of Bloor Street, 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. The area is close to fully developed, with over 90% of resale activity in 2022 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 more supply to the market, but if demand grows as expected, low inventory levels should persist throughout the downtown core.
Similar to the city as a whole, condos in Downtown West are about half the price of their freehold counterparts, ending the first quarter with an average sale price of just under $800K. Compared to the record peak a year prior, condos in Downtown West are down 7.7%, the freeholds are down 13.6%. Both property types saw inventory fall in the first quarter although supply remains higher than what's been observed over the trailing 5 years. With many buyers eager to re-enter the market, the second quarter of the year should continue to experience falling inventory levels.
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 dominated by condos. Condos in Downtown East are typically older, more spacious, and less associated with high-rise building formats.
In the first quarter of 2023, Downtown East reported an average sale price of $801K, down 1.1% from the previous quarter but only down 6.8% year-over-year, making it the best performing Toronto region when compared to the record peak in Q1-2022. After inventory steadily grew in 2022 to finish the year at double the preceding 5-year average for supply, the first quarter of 2023 saw a decline in inventory for both property types. Homes are also selling slightly faster when compared to the prior quarter, now listed for 24 days on 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 in the first quarter of $1,320K. Midtown Toronto is bounded by Bloor street to the south, Steeles 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, with an average sale price of $813K recorded in the first quarter. Freeholds, on the other hand, are dramatically more expensive at an average price of $2.2 million. As expected from this relative affordability, Midtown condos have seen prices grow at a faster pace than the freehold segment over the past 5 years. When compared to the record peak a year prior, condo prices in Midtown are only down 9.2%, outperforming Midtown freeholds (-13.6%), the Toronto municipality (-11.4%), and the GTA as a whole (-16.1%).
During the first quarter, Midtown condos took 5 days longer to sell than freeholds, with both property types reporting a quarterly decline in resale inventory levels. Resale inventory in Midtown is now more or less in line with its trailing 5-year average, with Midtown freeholds notably being the only segment in Toronto currently reporting with less supply than the trailing 5-year. With severely limited space for new freehold development in Midtown Toronto, inventory should continue to tighten throughout 2023 and going forward.
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, the Etobicoke housing mix is split equally between freeholds and condos, although condos will continue to grow in prominence.
To end the first quarter, the average sale price in Etobicoke was just under one million dollars, down 12.4% year-over-year. Similar to the rest of Toronto, condos in Etobicoke outperformed the freehold segment on a year-over-year basis, although freeholds have outperformed compared to the prior quarter. Freeholds in Etobicoke sold on average for $1,261K during the first quarter, roughly twice the price of an Etobicoke condo and down 15.9% from the record peak a year earlier.
Etobicoke inventory of both condos and freeholds has fallen for each of the last two quarters, now sitting at 2.2 months but still up slightly when compared to the trailing 5-year average. Properties in Etobicoke are also taking slightly longer to sell, up just over a week from their trailing 5-year average.
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 36% of resales over the past twelve months relating to condominiums.
Historically, and to this day, Scarborough is the most affordable region within Toronto, ending the first quarter with average prices of $619K for condos and $1,261K for freeholds. Across all properties, the Scarborough average price was down 16.4% year-over-year, making it the worst performing region within the Toronto municipality. As experienced city-wide, price declines in Scarborough were slightly larger for freeholds. When compared to other regions in Toronto proper, Scarborough leads both the freehold and condo segments for price growth when compared to the trailing 5-year average. This can be attributed to the relative affordability of Scarborough properties, which, like those in Etobicoke and Midtown, should continue to grow in prominence due to the limited space for new freehold development.
Scarborough inventory for both freeholds and condos fell in the final quarter of the year, ending the year with less than 2 months of resale inventory. Inventory declined again during the first quarter of the new year, now sitting at 1.5 months. Compared to the entire municipality, Scarborough has the lowest supply of homes for sale, with freehold properties in line with their trailing 5-year average at just over 1 month of available supply. As expected from this low inventory, properties in Scarborough continue to sell faster than anywhere in the city, with freeholds selling in just under 14 days, 11 days faster than Scarborough condos and 9 days faster than the municipal average during the first quarter.
Community Overview
Surrounding GTA
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. During the first quarter, York region had an average sale price of $1,318K, down 14.5% year-over-year, while Simcoe and Dufferin experienced larger price declines at 24.3% and 21.9% 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. During the first quarter, Peel region recorded an average sale price of $1,033K, down 19.8% from a year ago, while Halton’s average sale price of $1,221K was down 19.4%. 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 $905K, down 23.5% over the past year.
Despite year-over-year price declines, average prices across all surrounding GTA regions are up slightly when compared to the previous quarter, with the expectation for additional inventory tightening and price growth through the second and third quarters of 2023.
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 through the first quarter of 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.
