The Greater Toronto Area (GTA) housing market saw some major shakeups in 2022. It’s like the market was trying to break up with us, but we just weren’t ready to let it go. We were clinging onto those record levels from 2021 like a lovesick ex. But alas, the market had other plans.

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First off, let’s address the elephant in the room: interest rate hikes from the Bank of Canada. These hikes made it harder for folks to afford homes, which really put a damper on things. And as if that wasn’t enough, the Office of Superintendent of Financial Institutions (OSFI) and other mortgage lending guidelines (including amortization periods) didn’t give us any relief. It was like a perfect storm of affordability issues.

So what happened? Well, home sales trended lower in the spring and summer of 2022. It was a tough time for the market, but things started to level off in the late summer. It’s like the market was saying, “I still love you, but I need some space.” TRREB President Paul Baron even said, “the aggressive early market adjustment may be coming to an end.” Phew, that’s a relief!

Looking for more Toronto real estate market answers? Read these blogs next:

• Here We Go Again! Another Interest Rate Hike
• Demystifying TRREB Stats
• Tick Tock: Should You Time the Market?

Now let’s get down to the nitty-gritty: sales numbers. There were 75,140 sales reported through TRREB’s MLS System in 2022, which is a 38.2% drop from the record of 121,639 in 2021. Ouch. And new listings were down 8.2% compared to the previous year. It’s like the market was ghosting us.

But here’s the silver lining: the average selling price for homes in the GTA in 2022 was $1,189,850, which is an 8.6% increase from 2021. It’s like the market was saying, “I know I hurt you, but please take this expensive bouquet of flowers as a peace offering.”

So what was the deal with the lack of new listings? It’s simple supply and demand. The fewer homes there are on the market, the higher the prices will be. And this lack of supply has also affected the rental market, leading to double-digit rent increases in the GTA. It’s like the market is saying, “I know I hurt you, but I’m the only game in town so you have to pay top dollar to be with me.”

But it’s not all bad news! The condo market in the GTA actually did better than the freehold market. The total number of condo sales increased by 4.8% in 2022, and the average selling price was $719,161 (a 3.4% increase from 2021). It’s like the market is saying, “I know things have been rough, but at least you can still afford a condo.”

Unfortunately, the townhouse market didn’t fare as well. The total number of townhouse sales decreased by 28.8% in 2022, and the average selling price was $903,184 (a 6.5% increase from 2021). It’s like the market is saying, “I know you wanted a townhouse, but they’re just too expensive right now. Maybe try a condo instead?”

So what’s the takeaway from all of this? The GTA housing market saw some major adjustments in 2022 due to a combination of economic factors. Home sales and prices took a hit in the spring and summer, but things seem to be leveling off. The condo market is doing better than the freehold market, but the townhouse market isn’t faring as well.

Are you thinking about making buying or selling in Toronto market in the near future? You’ve got questions and I’m happy to answer them! Call or text me at 647-973-8392. Let’s chat!