“Real Estate Market Review: February 2023 and Beyond

It is always a good idea to put the real estate market into a historical perspective.  With that in mind, we look back to a year ago, in February and March 2022.  It was at that point that real estate prices were at their highest, and after that, we start to see a decline. 

Impact of Increasing Interest Rates on the Real Estate Market in the GTA

In March of last year, in an attempt to slow inflation, the Bank of Canada started to increase the key interest rate, which resulted in lower listings and sales.  Higher interest rates will result in a smaller buyer pool.  With the overall cost of the property higher due to the increased interest charges, a fair number of people who would have been able to qualify for loans are no longer considered safe risks.  As the interest rates continue to increase, the group of buyers decreases. 

A seller holding out for the asking price or more will find fewer potential buyers able to qualify at that price, plus the interest rates.  That means the property will stay on the market longer, will be removed from sale, or will sell at a lower-than-expected price.  This slow down is evident since the housing prices in the GTA are 17% lower than just a year ago. 

Opportunities for Buyers in the Lower Price Range Market Despite Market Slowdown

However, if you look at all the data, you will notice that there is still a good market for homes that are listed for under $1 million.  Since this is the price range of most home buyers and certainly most first-time buyers, this is an extremely positive aspect of the whole picture.  This price range is easily affordable for first-time buyers as well as those who are interested in upsizing or downsizing.  Even for individuals or families with credit issues, there are lenders who will support the economy.

While having a home on the market for an extended period of time is not advantageous for the seller, for the buyer, it means some very good deals to be made.  As the days increase, the seller is more likely to reduce the asking price, which results in a lower principal amount on which to base the interest rate.

Market Outlook for Real Estate in GTA Based on the February 2023 Numbers

Sadly, the full effects of the increasing interest rates have not ended.  There are still some rough months ahead for anyone involved in real estate.

The realtor associations in GTA showed the February 2023 numbers as down 47% from last year’s numbers, and the new listings also decreased by nearly as much at almost 41%.  With the average selling price down by almost 18%, everyone is waiting to see what happens this year as late winter moves into spring and summer, the traditionally high point in the year for real estate transactions.

Caution is still the watchword, but if you have the opportunity to make a good deal, check with easyhouseloan.ca.  We specialize in lending through a strategic group of non-traditional sources.  Our representatives keep pace with the changing market and the availability of funds and put forth significant effort to get our clients the best interest rates possible.