The average selling price of a home in the Greater Toronto Area is expected to hit a new record in 2022, according to the latest insights from the Toronto Regional Real Estate Board (TRREB). Here’s what we know from the latest TRREB insights:
This year, TRREB predicts that home sales reported through the MLS system will total 110,000. This is a dip from 2021, but still “a strong result,” compared to previous years. Meanwhile, the average selling price of a home will climb to $1,225,000, up 12 percent when compared to last year!
Labour market conditions and population growth will have a notable influence on the GTA market this year. Kevin Crigger, president of TRREB, explained that immigration into Canada and the GTA is expected to be at or near record levels in 2022, a population that will need housing. On top of this, job creation in average to above-average income industries is anticipated to remain strong, boosting confidence to make larger purchases.
“Unfortunately, the supply of listings will remain constrained, sustaining strong competition between buyers and double-digit growth in selling prices,” said Crigger.
Multiple interest rate hikes expected in 2022 by the Bank of Canada is another factor at play. Although the BoC’s tightening cycles have “historically led to fewer transactions,” TRREB notes that home buyers have recently been held to a much higher qualification standard under the stress test, which could “mitigate the impact of higher contract mortgage rates moving forward.”
The percentage of first-time buyers is expected to decline thanks to “lower intentions” in the suburban 905 regions surrounding Toronto. On the other hand, a resurgence in condo apartment demand from 2021 could attract first-time buyer activity to the 416 area.
The portion of existing homeowners who are “very likely” to put their home on the market this year will be lower in both the City of Toronto and the outer regions, according to TRREB.
“Given sales above the demographic norm over the past year, it makes sense that listing intentions are down,” said the report. “In addition, there still exists a vicious circle where homeowners will decide not to list because they fear they will not be able to find another home that meets their needs.”
Sales and new listings take a hit in January
Starting off 2022, sales and new listings were down last month, but prices continued to rise. Although last month’s sales were down annually, it was still the second-best in history for the month.
New listings fell by 15.5 per cent year-over-year, dropping from 9,438 in 2021 to 7,979. At the end of January, active listings totalled 4,140 homes, down 44 per cent to the lowest level in more than two decades.
Tighter market conditions pushed the average selling price to $1,242,793 in January, up 28.6 per cent yearly. The MLS Home Price Index Composite benchmark also rose 33.3 per cent annually. The average price of a semi-detached dwelling in the 905 region grew the most in January, rising 37.3 per cent year-over-year to $1,236,081.
“It is clear that 2022 is starting off the way 2021 ended in terms of the relationship between demand and supply in the GTA housing market,” said TRREB CEO John DiMichele, who also noted that it will be important for voters to understand real estate policies being campaigned on this year as part of the provincial and local elections.
Sources: Livabl – Michelle McNally
TREBB 2022 Market Outlook and 2021 Year in Review