Toronto Market Report
2023 Second 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. During the second quarter, sales activity and prices rebounded to more or less in line with where they were a year prior. 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 article, 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 second quarter of 2023 was just over $1.1 million, up 11% from the prior quarter and now down only 4.4% year-over-year. This no longer compares favorably to the surrounding GTA, which is only down 1% year-over-year. During 2022 and through the first quarter of 2023, demand was more resilient in the core Toronto municipality.
Despite Toronto’s relative outperformance in 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, continuing to fall during a strong spring market in the second quarter (down to 1.7 months). Average days on market, unchanged at 23 days in Q1, fell to 16 days in Q2. Compared to the record quarter of Q1-2022, when properties were selling in 11 days and inventory was critically low at under 1 month of supply, the market is slightly 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 second quarter of $787K and $1,694K respectively. Despite the relative affordability, latest data shows that Toronto condos have seen prices grow at a slower pace than the freehold segment year-to-date and over the past 5 years. With limited new freehold supply coming to Toronto proper, it is likely that this property segment will continue to see prices grow at a faster rate than condos.
During the second quarter, both property types experienced faster selling times to the tune of 1 week, with condos still taking longer to sell than freeholds. The condo segment continues to see greater inventory levels available for buyers, although inventory continued to decline for both property types in the second quarter. Freehold inventory now sits at 1.3 months, slightly less than 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 BloorStreet, 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 over $800K. Compared to a year ago, condos in Downtown West are down 4% while freeholds are up 3%. Both property types saw inventory fall in the second quarter although supply remains slightly higher than what's been observed over the trailing 5 years. With many buyers eager to re-enter the market, the third quarter of the year should continue to experience tight inventory levels, although back-to-back rate hikes in June and July has dampened sales activity from the monthly high recorded in May.
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 second quarter of 2023, Downtown East reported an average sale price of $850K, up 6% from the previous quarter and only down 4% year-over-year, making it the best performing Toronto region when compared to record prices observed in the first half of 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. Supply continued to decline in Q2, now sitting in line with the trailing 5-year average. Homes are also selling slightly faster when compared to prior quarters, now listed for 19 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 to end 2022 of $1,360K. 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, with an average sale price of $890K recorded in the second quarter. Freeholds, on the other hand, are dramatically more expensive at an average price of $2.4 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. Year-over-year, condo prices in Midtown are only down 1.2%, outperforming Midtown freeholds (-4.5%), the Toronto municipality (-4.4%), and the GTA as a whole (-5.7%). During the second quarter, Midtown condos took 3 days longer to sell than freeholds, with both property types reporting a quarterly decline in resale inventory levels. Resale inventory in Midtown is now less than its trailing 5-year average, with Midtown freeholds leading all property types and regions for least supply when compared to its trailing 5-year average. With severely limited space for new freehold development in Midtown Toronto, inventory is likely to remain constrained.
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.
During the second quarter, the average sale price in Etobicoke was just under $1.1 million, down 7% year-over-year. Condos in Etobicoke are performing more or less in line with the freehold segment on a year-over-year basis as well as when compared to the prior quarter and trailing 5-year average, where they are up 15%. Freeholds in Etobicoke sold on average for $1,416K during the second quarter, roughly twice the price of an Etobicoke condo.
Etobicoke inventory of both condos and freeholds has fallen for each of the last three quarters, now sitting under 2 months with freeholds now having less supply than its trailing 5-year average. Like other GTA markets, properties in Etobicoke are selling quicker, down one week from the prior quarter and back in line with the 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 second quarter with average prices of $668K for condos and $1,348K for freeholds. Across all properties, the Scarborough average price was down 4.5% year-over-year, more or less in line with the entire Toronto municipality. As experienced city-wide, year-over-year price declines in Scarborough are slightly larger for condos. When compared to other regions in Toronto proper, Scarborough continues to lead 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 continued to fall in the second quarter, now sitting at just over 1 month of supply. Compared to the entire municipality, Scarborough has the lowest supply of homes for sale, which has been the norm over the past 5-years as well. As expected from this low inventory, properties in Scarborough continue to sell faster than anywhere in the city, with freeholds selling in just under 10 days, one week faster than Scarborough condos as well as the municipal average during the second 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 second quarter, York region had an average sale price of $1,380K, up 1% year-over-year, while Simcoe and Dufferin experienced price declines of 7%.
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 second quarter, Peel region recorded an average sale price of $1,130K, down 4% from a year ago, while Halton’s average sale price of $1,284K was down 3%. 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 $982K, also down 3% year-over-year.
Despite year-over-year price declines, average prices across all surrounding GTA regions rose again from the prior quarter, marking back to back quarterly increases. However, latest rate hikes are likely to stabilize supply levels and put a temporary pause on this price rally, with average prices in the GTA falling in June and July after peaking in May.
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 second 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.
