There is no doubt that the Toronto and GTA real estate market has been off to a hot and rowdy start to begin 2022. With demand at all time highs and inventory near all time lows, this allowed for a sellers market much to the disadvantage of buyers. A seller’s market is generally defined as one where demand greatly supersedes supply. These conditions, in conjunction with historically low borrowing rates, allowed for rapid real estate appreciation and monthly price increases. For reference, the average price of a home across the GTA was $1,242,793.00 in January of 2022. This was already a huge increase from the month before, December of 2022. Yet the biggest price jump would come in February of 2022, wherein the average sold price for a home was $1,334,544.00. Now into April, the average sold price is back down to January levels – coming in at $1,254,436.00. This drop in prices can be attributed to conditions changing in the favor of a more buyer friendly market. Due to the increase of rates by the bank of Canada, there has been a dip in demand and increase in supply. The exact opposite of what was occurring early in 2022. When supply is greater than demand, as is the case into April and May, the market enters more moderate and buyer friendly levels.
Yet prices have not diminished equally all over. When we take a look at more community based numbers, we see that freehold detached prices have dropped the most in the suburbs; primarily Peel, Durham and York Region. Whereas prices in the municipality of Toronto, although down from the all time highs experienced early in the year, have experienced a more tempered drop. Detached prices in Peel have dropped from a staggering $1,752,303.00 in February down to $1,626,00 in April. Similarly, in Durham prices have fallen 13% from the record high of $1,379,287.00 in February, down to $1,192,065.00. The story is much the same in York Region, where detached prices dropped 11% from the peak in February; dropping from $1,992,741 to $1,761,834.00.
Toronto prices have held up much better. The city of Toronto overall has only experienced a 6% drop from the highs of February. When we break down the City Of Toronto to Toronto West, Central Toronto and Toronto East, we see much of the same story; prices are down from the highs of early 2022 but far less than the suburbs of the GTA. The most resilient portion of Toronto, and one which has not dropped but one which has actually increased, is Toronto West. Here the average price is at $1,703,000, marginally up from the average of $1,699,000 in February.
In conclusion, it seems that thus far in 2022, the suburbs of the GTA have been impacted more by the shifting market than the city of Toronto. Although when we take a macro approach and look at home prices across all property types across all areas, the GTA is down back to early 2022 levels as a whole. But when breaking it down according to detached properties and particularly areas such as Peel, Durham, York Region and Toronto – we see that Toronto has remained resilient in the face of the increasing rates and shift towards a more moderate and buyer friendly market.