When it comes to navigating headlines and making informed choices about the Toronto housing market, it’s hard to know what to focus on. That’s why we've created this space: to help you stay in the loop with what's happening in Toronto and GTA real estate. We update it often, so you can always come here for the most current stats, news, insights and more.
1. UNDERSTANDING THE MARKET
Toronto housing market: what you need to know right now
In May, the market continued steadily on its upward trajectory. May saw 9,012 sales – up 5% from April and 25% over this time last year. Supply, however, is down. Way down. There were 18.7% fewer new listings compared to last May.
That growing gap has made things very competitive – and it’s driving up prices. Buyers have gotten comfortable with higher interest rates, and record population growth is putting even more pressure on the market. As a result, average prices across the board are back up to what we were seeing last year at this time.
But what happens next? Now that the Bank of Canada has announced another 0.25% increase, what will that do to market momentum? If past increases are any indication, it will have a cooling effect as buyers grapple with even higher borrowing costs and lose the confidence they built over the last 6 months.
Should I buy or sell this summer?
That depends on your goals, your timelines, and how comfortable you are with what’s happening in the market. Here are a few factors to consider:
1. Summer can be slower. Kids are off school, families are heading to the cottage, and a lot of people just aren’t in the headspace to be making big real estate moves.
If you’re buying, there probably won’t be as many listings to choose from – not that there were that many to begin with. But with fewer buyers out there, you’ll have less competition for the listings that are available.
If you’re selling, you’ll likely have a smaller pool of buyers. But with fewer listings in the market, yours could really stand out. And also remember: people who have been waiting for the perfect property to pop up always have an eye on the market.
2. There’s a serious housing shortage. A lot of people are in the market for properties right now, and there aren’t enough of them to go around. So the traditional summertime lull might not happen.
3. But then there’s that rate hike. Potentially, it could scare off buyers. On the other hand, we’re in a landscape where people have gotten used to the idea of higher rates, and after all the other hikes, 25 basis points may not feel like a particularly big deal. Definitely a wait-and-see scenario.
Market Insights at a Glance
Got questions? Our agents have the answers: get in touch with one of our area experts anytime.
What's the difference between a buyers' and a sellers' market?
It all comes down to supply and demand – and who has the advantage in a sale, the buyers or the sellers.
What is a buyers' market?
It's when there are more properties for sale than there are interested buyers – when supply exceeds demand. There's less competition, prices drop, properties stay on the market longer, buyers can stipulate conditions, and sellers have to do a lot more in the way of marketing, staging etc. to attract buyers – and be willing to negotiate to make a sale happen.
What is a sellers' market?
It's when there are more buyers than available properties. When supply is low, competition ramps up. Properties sell faster, for higher prices, and buyers are willing to do more (foregoing conditions, agreeing to shorter closing dates, offering more money and accepting properties “as is”) when they're competing with other bidders. There’s less opportunity for buyers to negotiate: the sellers are in control.
So what does all this mean to you?
I’m a buyer in a buyers' market. The world is your oyster. Lots of selection, less competition, less pressure and plenty of good opportunities to be had. That said, if you LOVE something, you still need to move quickly. A great property is a great property, and it will get snapped up no matter what the market.
I’m a buyer in a sellers' market. You’ll need to jump on listings fast, expect to compete with multiple offers, and find ways to encourage the sellers to pick you over other bidders.
I’m a seller in a buyers' market. First off, don't panic. Don't sell if you don't have to, but if you do need to move, you can still get a good price by making your property stand out with great staging and marketing.
I’m a seller in a sellers' market. A good sales strategy will likely net you a great selling price without conditions. A great agent can really help you here by leveraging offers against each other and fighting hard for you.
A good agent is your best friend, no matter what the market
Ultimately your best bet is to work with a very seasoned REALTOR®, one who understands individual micro markets and can guide you through a smart move.
2. BUYING
Is now a good time to buy?
Things are pretty competitive out there: according to April and May housing stats, we’re back in a sellers’ market, with prices getting close to what they were early in 2022, before the Bank of Canada started raising interest rates. Does that mean it’s a bad time to buy? No. But it does mean you should be prepared to compete with other buyers, especially with so little inventory out there right now.
And now that we’ve just seen another rate hike from the Bank of Canada, you’ll need to factor in an additional 0.25% for your borrowing rate, unless you were already pre-approved at a lower rate and will be going the fixed-rate mortgage route. The rate hike may take some buyers out of the running and make it a little less competitive out there, but we don’t know what that will look like just yet.
Sign up to condos.ca or property.ca today to get all the info you need to buy smart.
Is it better to buy or rent?
Property.ca Inc. agent Sean Miller says buy now if you can – and buy whatever you can. If you buy, you’re putting your money back into your own pocket and taking advantage of appreciation. But if you keep waiting so you can afford the “perfect” place, or renting while you try to time the market to get the best price, you’re handing money over to someone else instead of putting it towards equity.
“If you’ve got enough for a down payment (even if it’s for something really small or in a location you don’t love), decent credit and a stable job, my answer will ALWAYS be don’t wait,” says Sean.
Your first place doesn't have to be your forever home
Can’t afford a house? Buy a condo. Don’t have enough for a 2-bedroom? Get a 1-bedroom. If that’s still too much, go for a studio. And if a studio downtown is out of your reach, buy one in a less expensive neighborhood – or even in another city.
If it’s too small for you or not in a location you like, that’s ok. Stay in your rental or live with your family for a while: your renter will pay your mortgage as you build equity and let the property appreciate. It’s a formula that works, but it takes time.
Can’t afford to buy the home you want? Read this!
Still can't afford to buy something right now?
Talk to a mortgage broker about private financing
Get a co-signer
Ask your family for help
Buy with a partner
NEW: Canada’s Tax-Free First Home Savings Account is here!
There’s a shiny new addition to your down payment saving strategy: it’s the Tax-Free First Home Savings Account (TFHA), which officially came into effect on April 3, 2023. Here’s what you need to know:
You can contribute $8K a year – to a total of $40K per person.
You cannot have owned a property in the last 4 years
You can only use it to buy a place you’re going to live in
You can combine it with your First-Time Home Buyers Plan
And here’s the best part: unlike the First-Time Home Buyers’ Plan, which lets you borrow from your RRSP, you don’t have to pay it back. And you can combine the two programs to help you get to your goal faster.
This very comprehensive overview from the Department of Finance has everything you need to know about the TFHA.
Read more: Tax-free savings tools to help you buy your first home
Understanding value pt 1: Using sold data
Not sure what you should be offering for a property – or if it’s a good value? Looking at what properties have sold for recently will tell you everything you need to know about current value. Condos.ca and property.ca make that easy: simply toggle your search from “for sale” to “sold,” and you’ll find the sold prices for every property in the building and neighbourhood.
How to search sold data
Search filters help you compare apples to apples – if you’re looking at a 750 sf 2-bedroom downtown in a building with a pool, use filters to find similar properties, and voila! You’ll see what the place you’re interested in buying will potentially sell for. It’s easy to filter by time period, too: simply select what has sold in the last 7 or 14 days for the most current price data.
Read more: How looking at sold properties can help you make a winning offer
Understanding value part 2: why is this property priced so low?
If you’ve been house or condo hunting recently, you’ve probably seen some prices that seem too good to be true. Maybe you’ve tried making an offer on one of those properties and gotten massively outbid.
Frustrating? Definitely. But it’s actually pretty common. What’s happening is a strategy designed to generate interest – and potentially a higher price than the sellers would get if they listed at market value.
So if your budget is $800K and you see what seems like a “deal” for $795K, it’s probably not actually in your price range.
So how do you know what a property is actually worth – and whether you have a chance at buying it?
Look at the most recent sales in the building, on the street, and/or in the area. Be sure to compare apples to apples: when you’re looking at what a comparable place just sold for, look at ALL the variables that might impact value, like number of bedrooms, location in the building or on the street, views, upgrades, number of storeys, size of backyard, etc.
This is where your agent can really help you. We are here to help you navigate this roller coaster of a market and figure out what a specific property is worth so you can come in prepared to compete – or walk away if it’s out of your reach.
Read more: Bidding wars and bully offers – strategies for success
Inflation and interest rates 101
Want to know why the Bank of Canada has raised rates so many times – and what it could mean to your real estate goals? This section will help you understand overnight rates vs. bank rates, variable rates vs. fixed rates, and what they have to do with inflation.
Inflation basics
The inflation rate is a measure of how much prices for things like food, shelter and transportation go up over time. 2% a year is a healthy amount, but right now, we’re at about 7%, which isn’t. (Sticker shock at the grocery store is real.)
The pandemic is to blame, impacting global markets, causing supply chain issues, and changing the way people spend. Then there’s the war in Ukraine, which is causing massive uncertainty and wreaking havoc on the global economy. Prices are going up so fast that our incomes can’t keep up.
The only way to slow inflation is to cut consumer spending – and that’s where the Bank of Canada interest rate hikes come in. Higher interest rates make it more expensive to borrow so people spend less, and make saving money more attractive by allowing higher earnings on investments.
As soon as inflation has gotten back to a healthy level, interest rates will start to come back down. However, although they haven’t gone up in the last couple of months, they won’t be going down anytime soon: the Bank of Canada has told us that they’ll probably stay where they are for a while.
All about interest rates
Overnight rate. The rate that’s set by the Bank of Canada. The current overnight rate is 4.25%. This is NOT the rate you’ll pay to borrow – it’s the rate banks use when lending money to each other.
Prime rate. This is based on the overnight rate and is the foundation for the rate banks charge consumers. Right now, the prime rate is 6.45%.
The actual interest rate you pay. The bank rate is based on the prime rate, but what you actually pay depends on the type of mortgage you get, your credit rating, and other factors.
Variable rate mortgage. This is a mortgage where you pay at the going interest rate. Your payments either fluctuate month to month based on the current rate – or they stay the same, but the amount that goes to interest and principal changes if the lending rate changes.
Fixed-rate mortgage. This is where you lock in at a certain rate for a specified amount of time. Your payments are predictable and you’re protected from rate hikes for the loan term, but your rate is higher than with a variable rate.
Thinking about a fixed-rate mortgage?
The interest rates on fixed mortgages are lower than they are on variable products – a flip most of us haven’t actually seen before. As a buyer, should you go with a fixed-rate mortgage? And what about homeowners? Should you break your variable-rate mortgage (which can incur a penalty of 3 months’ worth of payments) now that the Bank of Canada has decided to hit pause on further hikes?
So while it seems like a no-brainer to go with the cheaper rate, the decision isn’t necessarily as simple as that. Consider this: when you lock into a fixed-rate mortgage, “locked” means “locked.” It can cost thousands to break it before the end of the term. And experts are predicting that rates may start to come down in early 2024 – or even sooner. On the other hand, the experts have been wrong before.
So what’s the best route? Talking to your lender or mortgage broker. Our agents recommend brokers over someone who works at a bank because they have access to way more options – and aren’t under pressure to sell specific products that may benefit the bank more than they help the lender.
James Harrison of Mortgages.ca has been talking to a lot of clients who are thinking about locking into a fixed rate to avoid further increases.
“We are recommending a short-term fixed or variable right now to weather the next year or two,” he says. “As we have seen time and time again, nothing lasts forever, and what goes up must come down.”
He also recommends that homeowners pay down as much debt as they can right now.
“With today’s higher rates, it finally makes sense to make lump sum payments on the outstanding balance of your mortgage. It’s like getting an instant return of 5-7% on an investment! If you can do it, I really recommend it.”
And what about people who are struggling to make their much higher monthly payments on their variable-rate mortgages?
“Now is a great time for those in an adjustable-rate mortgage to restructure,” he says. “If you’re falling behind monthly, doing a full budget review with a broker to see how you can free up cash flow can be a good strategy for getting through the next 12-36 months.”
One of the ways to free up cash is to extend the amortization period of your mortgage. By extending the length of the loan, yes, you will pay more in interest over time, but your monthly payments will be more manageable now. And you can always change things up again or make lump sum payments if your financial situation changes or interest rates drop.
How can I help my kids buy?
Want to help your kids get into the market? You’re not alone. More and more parents are tapping into their own savings and equity to help their kids become homeowners.
1. Gift them the money. “It’s a great way to give them part of their inheritance now, tax-free,” says James Harrison of Mortgages.ca,. “If you can help them get to 20% down (or more), that will help significantly with buying power – and they won’t have to pay for SMHC insurance.”
2. Lend them the money. Be very clear about repayment terms. Having paperwork in place will be helpful if a couple splits up or they default on their repayment.
3. Co-sign or be a guarantor on their mortgage. Adding yourselves to the mortgage will give your kids more borrowing (and buying) power. However, if your kid defaults on the mortgage, your credit rating could take a hit – and you'll be on the hook for payments.
4. Buy a property together. This is a great option for parents who want to get their investment back when the home is sold. Whatever percentage you put in, that's what you'll get back at the end.
5. Buy the property yourselves, then transfer ownership later and pull out your equity. This is a great option for parents of students who are coming to the GTA to go to college or university. You can buy a place for them to live in while they're in school, then once they graduate and are working, they can take over the mortgage payments.
6. Let them live with you while they save their down payment. Offer up a free (or cheap) place to live. GTA rents are nuts, and not having to shell out $2,500 or more a month will add up fast.
Read more: 7 ways parents can help their kids become homeowners
3. SELLING
Is now a good time to sell?
Definitely. With interest rates staying steady, buyer confidence is back. People have come to terms with the idea that borrowing isn’t super-cheap anymore. Offer dates and bidding wars are back, especially for detached homes. Plus, skyrocketing rent prices convince more renters that buying is a better option. Of course, we will have to see how the latest rate hike affects buyer appetites.
Sign up to condos.ca or property.ca to find the data you need to sell with confidence.
Price, presentation, promotion: what sellers need to know right now
How do you sell successfully right now? Here’s what Property.ca Inc. branch managers Todd Armstrong and Josh Benoliel have to say.
1. Price it right
“Before making any kind of pricing decision, get a handle on what’s going on in your neighbourhood,” says Todd. “If all the local listings are priced low with offer dates, that should be your strategy too. Because if everyone else is doing that and you list close to market value, buyers won’t bite. They don’t know what’s in your head – they’ll just assume your place is out of their range.”
On the other hand, if everyone in the building or area is pricing at market value, then that should be your approach too. And if it’s a mixed bag? Listen to your agent, and do what they recommend.
One thing to remember, though: underpricing a home does not guarantee a bidding war. You could just end up getting offers that are way lower than what you want – or none at all. Only specific types of homes – unique, renovated, in great locations, with great views on high floors, etc. – tend to garner that kind of attention.
Read more: Everything you need to know about selling a property in Toronto and the GTA.
2. Focus on great presentation
“If you want to do well right now, your property needs to be a 10/10,” says Josh. “Buyers tend to gravitate towards the showcase-ready homes.”
Fix everything that needs to be fixed. Replace caulking, fix broken tiles, recaulk bathtubs, scrub light switches, replace loose door handles, patch the cracks in the driveway, weed the patio.
Make first impressions count. Buyers have 50% made up their minds as soon as they’ve walked in the door. Invest in making the exterior and the entryway as appealing as possible.
Brighten up the place! Todd recommends 3000 kelvin bulbs throughout to ensure paint colours appear true. Avoid blue LEDs or fluorescent lights – they make a room feel cold and antiseptic.
Stage it. Todd says every dollar spent on staging means the sellers get $3 back. It pays to help buyers envision the possibilities of living there.
Read more: 9 reasons your home isn’t selling
3. Promote the heck out of it
The more people see your listing, the better, so find an agent who will get it in front of as many eyes as possible. Todd’s top tip: work with a Property.ca Inc. agent – your listing will automatically be featured on condos.ca and/or property.ca, high-traffic sites that’ll get you amazing exposure. Also, hire an agent with a strong following on social, and focus on really great photos. If you’re selling a condo, don’t forget to include appealing pics of the building amenities. Read the full blog post here.
Want to see what properties in your area have sold for? Here’s how to search recently sold listings.
3. RENTING
Toronto's record-breaking rental market
According to Urbanation, average rents in purpose-built apartments in Toronto have broken the $3,000 barrier for the first time, and condo rents are a bit lower, hovering just over the $2,700 mark, with studios and one-bedrooms seeing the biggest price increases year-over-year (17.8% and 17.1%, respectively). Vacancy rates are well below 2%.
In June, the average rent for a 1-bedroom in Toronto was $2,532. For a 2-bedroom, it’s $3,264. (Data is taken from renters.ca).
Get the scoop on the numbers in Renters.ca’s National Rent Report
Looking for a rental right now? 5 things to keep in mind
If you’ve read a newspaper recently, you know this is a tough time to be a renter. Competition is fierce and prices just keep going up. But going in educated and prepared can help: here are some helpful insights to be aware of as you search.
1. You may face a bidding war. For a rental? Yep, it’s totally a thing now, especially for properties under $2,500.
2. It comes down to eliminating uncertainty for the landlord. Landlords don’t want risk. A letter of employment, your last few pay stubs, a credit report, and a completed OREA rental application will go a long way. Proof of your legal status in the country will also help reassure them. Some motivated renters have even been offering several months’ worth (up to a year!) of rent up front. Keep in mind that while it’s okay to accept this kind of payment if it’s offered, it’s NOT legal to request it.
3. Be ready to move fast on a unit you like. With stiff competition for rental units, you won’t have time to think it over or get your credit report done before submitting your offer. Have all your documents ready to go before you start looking, and you’ll be able to make quick decisions.
4. Some tenants are offering prepaid rent. Landlords aren’t legally allowed to ask for anything more than first and last months’ rent, but they can accept it if it’s offered. Just be careful: working with a REALTOR® will help protect you against scams.
5. Working with an agent gives you an edge. Real estate agents know how to present a client and structure an offer so the landlord will say yes. But even with a good agent, it’s competitive out there. Even great quality renters are being turned down right now.
Looking for a Toronto or GTA rental? Search properties for rent on condos.ca or property.ca to be matched with a lease specialist agent who will give you an edge over the competition and help you make a great move.
5 things investors should know about the Toronto rental market right now
If you’re thinking about buying an investment unit to rent out, here are a few things to keep in mind:
1. This is a great time to be a landlord. “Everything is getting rented,” says Julian Kashani, Broker. “There are more tenants than landlords, and available units are getting snapped up fast.”
2. You may get multiple offers for your property. The typical offer is around $25 to $100 more a month, sometimes with a quicker closing. However, some of our agents have been seeing multiple offers as high as $300 over asking, especially in high-demand neighbourhoods, where some have gotten up to 18 offers on a rental property.
3. Units with outdoor space are in hot demand. After a long pandemic, people want balconies and easy access to the outdoors.
4. Renters want condos with WFH areas. Properties with a quiet place to work are very popular. Coworking spaces are becoming more common in newer builds.
5. Amenities are important. Lounges, rooftop gardens, pet-friendly buildings – those are all more important to renters than they ever have been before.
Ready, set, RENT: the condos.ca rental process
Why do you need to have your credit check and letter of employment ready before going to see a rental unit? It’s a question our agents get asked a lot, and the answer is simple: it ensures you’ll go in knowing what you’re qualified to rent. Plus you won’t lose out on a great place you love because you don’t have all your paperwork ready.
Since the rental market is pretty much back to its pre-COVID hotness, there’s stiff competition for nice units (even bidding wars). Desirable condos are moving fast, and renting with really quick timeframes: if you have to wait for HR to get you a letter of employment, that cute unit with the great view will end up going to the renter with all their docs ready to go.
Here’s what you need before viewing properties
A completed rental application (your agent will provide the right one)
An employment letter that lists your position, salary and contact info for your manager/HR dept
Your credit score and report from Equifax or TransUnion
References (optional, but recommended)
Download: 5 steps to renting your next condo (one-page printable guide)
Once you’ve got all those docs in hand, you can start your search. But first, register for a condos.ca account (if you haven’t already). It will give you access to all the useful information on the site, and connect you with a Property.ca Inc. agent who can help you find a great place.
Found a listing that looks good? Go see it! Just schedule a time with your agent.
Looking for a rental in downtown Toronto? See what’s out there in your price range.