Toronto’s housing market is experiencing a significant shift in dynamics, as the once red-hot pace of bidding wars and soaring prices has given way to a more subdued environment. Realtor Danielle Demerino sheds light on the evolving landscape, highlighting contrasting experiences for buyers and sellers.
Buyers now find themselves in a position of unprecedented choice, with a growing inventory and diverse options available. On the other hand, sellers may face a challenging reality, with prices potentially dipping by as much as 18% from the peak in 2022. This shift has led to what industry insiders are terming “the new normal.”
Factors such as rising interest rates and affordability constraints are reshaping the market, influencing who participates in real estate transactions. Homes are taking longer to sell, typically around 30 days, and buyers are increasingly motivated by significant life events rather than pure investment purposes.
Despite the market adjustments, there are observable movements, with September witnessing an 8% surge in sales volume even as prices saw a slight decline. Demerino notes that sellers are recalibrating their expectations while developers are encountering greater challenges in a market with reduced purchasing activity and minimal new construction starts.
Looking ahead, the long-term impact of these shifts is projected to include a potential shortage in new housing supply, given the current constraints on new developments. The resale condo market is also experiencing slower movement, with only high-quality properties attracting significant interest.
With the recent interest rate cut by the Bank of Canada, there is anticipation of a modest uptick in market activity; however, the overall sentiment suggests a cautious approach as stakeholders assess the evolving conditions before making major decisions.
While Toronto’s housing market may no longer be characterized by the frenzied activity of previous years, many view this period of adjustment as a necessary step towards achieving a more balanced and sustainable market environment for both buyers and sellers.