Toronto and GTA Markets in January 2023

GTA REALTORS® Release January 2023 Stats

As we moved from 2022 into 2023, the Greater Toronto Area (GTA) housing market unfolded as expected. The number of January sales and the overall average selling price were similar to December 2022. On a year-over-year basis, both sales and prices were down markedly, continuing to highlight the impact of higher borrowing costs on affordability over the last year.

“Home sales and selling prices appear to have found some support in recent months. This coupled with the Bank of Canada announcement that interest rate hikes are likely on hold for the foreseeable future will prompt some buyers to move off the sidelines in the coming months. Record population growth and tight labour market conditions will continue to support housing demand moving forward,”

said TRREB President Paul Baron.

GTA REALTORS® reported 3,100 sales through TRREB’s MLS® System in January 2023 – in line with the December 2022 result of 3,110, but down 44.6 per cent from January 2022. The average selling price for January 2023 at $1,038,668 was slightly lower than the December 2022 result and down by 16.4 per cent compared to the January 2022 average price reported before the onset of Bank of Canada interest rate hikes. The MLS® Home Price Index (HPI) Composite Benchmark was in line with the December result, but down by 14.2 per cent compared to January 2022.

“Home prices declined over the past year as homebuyers sought to mitigate the impact of substantially higher borrowing costs. While short-term borrowing costs increased again in January, negotiated medium-term mortgage rates, like the five-year fixed rate, have actually started to trend lower compared to the end of last year. The expectation is that this trend will continue, further helping with affordability as we move through 2023,”

said TRREB Chief Market Analyst Jason Mercer.

“All three levels of government have announced policies to enhance housing affordability over the long term, including many initiatives focussed on increasing housing supply in the ownership and rental markets. Most recently, we were encouraged to see Toronto City Council support the Mayor’s 2023 Housing Action Plan as part of the City’s overall $2 billion commitment to housing initiatives,”

said TRREB CEO John DiMichele.

This is the monthly indication of the average sales prices of single family homes (all property types) in the GTA:


$932,297              January 1st

$966,001              January 31st

$1,044,910           February

$1,097,319           March        

$1,090,414           April

$1,108,137           May

$1,089,012           June

$1,061,653           July

$1,070,176            August                   

$1,135,027            September

$1,155,624           October

$1,162,564           November

$1,157,837           December


$1,157,837           January 1st                    

$1,242,407           January 31st

$1,334,062           February                         (all time peak)

$1,298,671           March

$1,250,739           April

$1,210,646           May

$1,145,786           June

$1,073,316           July                                (bottom)

$1,079,586            August                           (reversal)

$1,086,560           September                     

$1,090,301           October                         

$1,079,087           November                      (expected slight decline)

$1,051,031           December


$1,051,216           January 1st

$1,038,668           January 31st                    (similar to February 2021)

What usually happens each year? The market starts off in January, rises in February, gains momentum in March and April and reaches its peak for the year in May. The market declines in June, declines in July and then bottoms out in August. In September, it reverses itself and rises once again, and in October, it reaches its second peak for the year. In November, the market declines, as it does again in December, and the cycle repeats itself the following year.

For 2022, we were off to a fairly predictable start. The market got going in January, and rose again in February. The surprise was a slight dip in March. Then, we faced further declines in April and May which should have been the top of the market for the year. There was a drop in June, the market bottomed out in in July, reversed in August, rose in September, rose in October to a second peak in the year, declined in November and then declined further in December. Isn’t that exactly what is supposed to happen every year!

The overall market peak took place at the end of February 2022. Then we had a series of significant increases in the Bank of Canada rate. That took $295,394.00 out of the average sale price. That’s substantial. The full impact of the increase on 25 January 2023 will not be known until next month, but the 0.25% increase was highly predictable.

The Buyers out there have the same amount of money that they had before, however, now more money will be going to the Banks for interest on mortgages than to the Sellers.

Price Decline

We really have to go back to the beginning of 2022 to assess the real impact. If we start with the beginning of the year, the market declined from $1,157,837 to $1,038,668 or $119,170,

If we go the end of January 2022, the market declined from $1,242,407 to $1,038,668 or $203,739.

If we go the end of February 2022 (the peak), the market declined from $1,334,062 to $1,038,668 or $295,394.

So, in round numbers:

From 1 January :                      $120,000.

From 31 January                      $200,000.

From 28 February:                   $300.000.

This covers the high intensity, active and exuburent market in the winter of 2022. By and large, most people aren’t paying any attention. They were not sitting there with calculators determining what their property might fetch on the market. So, while we have a difference of $180,000 in two months within that three month time period, few participated. Few really lost any money.

The exception, obviously, would be those who purchased at the height of the market, lost and now have lost $295,394. That may indeed represent all of their equity. That would be the “good news” for those who were able to close. For others, they purchased, but then saw a sudden decrease in the value of their own property which they may not have been able to sell. As a consequence, they lost value in two houses at the same time, all as a result of the Bank of Canada’s monetary policy.

Sales Activity

This is the biggest problem. Sales in the month of January 2022 were 5,594, which dropped to 3,100 in 2023 which is a decline of 2,494 or 4 or 45% (44.58%)

This is the most significant indicator for the market. No deals! Buyers not buying and Sellers not selling.

However, what we have just witnessed is a decline and a bottoming out, which should suggest that this is a good time to buy. There is one little problem and that is, that Buyers have less money to spend since interest rates went up.  The Bank of Canada raised the Bank rate on 25 January 2023, but also indicated: “that’s it, for now”. So far, prices have dropped and Sellers have paid the price. This isn’t likely to continue indefinitely.

Overall, it is still a Sellers’ market. There just isn’t enough inventory. What we are looking at right now, is simply some temporary opportunities.

We may see some forced sales, where homeowners simply can no longer afford their properties and they will be forced to sell or their mortgagees will sell itr for them.

It’s impossible to predict the future, but we can certainly observe the current trends in the marketplace to give us some guidance.

If you would like to discuss the market, please give me a call at 647-404-8150.

Brian Madigan LL.B., Broker

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