Royal Lepage released their 2023 market forecast for the real estate market here in Canada. With the Bank of Canada raising interest rates aggressively in March of 2022 we saw a dramatic drop in home trading from 2020 & 2021, increasing the rates removed people out of the market reducing the demand and resulting in lower activity in home buying and selling this past year.
For those waiting for prices to drop significantly before getting into the market, the market would have to see the supply of homes exceed the demand of those homes and Canada is struggling with a small but long term housing shortage. This tells those looking to get into the market that although the first quarter of 2023 will see a drop in the average selling price for 2022, year-over-year prices are expected to be above pre-pandemic levels.
Of those buyers that were looking to get into the market in 2022, many have put their plans on hold due to the rise in interest rates and are waiting in the weeds for the right moment to jump back in and many think that it will be when rates not necessarily lower but stabilize. Without an increase in housing supply all those buyers will start re-entering the market and we will see increased competition, specifically in more affordable purchases like condos.
Royal Lepage has done a great job at summarizing what individual markets in Canada can expect. Here in the Greater Toronto Area encompassing Toronto and surrounding areas (Burlington, Ontario) have seen the steepest price declines this year but home ownership is out of reach for many buyers this has put pressure on the rental market which has now been riddled with competition throughout 2022. The 2023 market forecast is predicting that during this year activity levels for the GTA are expected to increase by the middle of 2023 if the interest rates stabilize but the bulk of price correction has happened and normal pricing trends should be coming soon.
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