Given the recent volatility of Toronto’s real estate market many would-be property investors have been biding their time, waiting for prices to slump. Last month, they got their wish.
The February report from the Toronto Regional Real Estate Board (TRREB) shows a big drop in average home prices across the GTA as the market corrects from last year’s peak. The average selling price for February was 17.9% lower than those seen during the same period in 2022 – making it the steepest price drop ever recorded.
Lured by the more palatable prices, buyers are now coming back and driving sales at the lower end of the market.
“Home prices have dropped over the last year from the record peak in February 2022, mitigating the impact of higher borrowing costs,” said TRREB President Paul Baron. “Many homebuyers have also decided to purchase a lower priced home to help offset higher borrowing costs. The share of home purchases below one million dollars is up substantially compared to this time last year.”
A summer seller’s market
In today’s hot housing market, investors have to move fast. There may be a window of opportunity now, but experts predict that it will soon close as competition heats up.
According to TRREB figures, prices aren’t the only thing that’s dropping. New listings are also down from last year, falling by 40.9%. As interest picks up but listings stay stagnant, realtors are looking ahead to a seller’s market. The TRREB predicts that the second half of the year will see prices rise again as demand grows.
“It will be a year of two halves in 2023,” said TRREB Chief Market Analyst Jason Mercer.
“The second half of 2023 should be characterized by an increase in demand for ownership housing, supported by lower fixed mortgage rates, a relatively resilient labour market, and record immigration.”
Why you should consider becoming a Toronto landlord
The message for would-be Toronto homeowners is clear – don’t delay hoping that prices will drop further as all indications are that they will only rise. Property is typically a solid investment, even in uncertain economic times, providing an asset that should hold its value over the long-term.
And with rents soaring in Toronto, it’s not just a good time to buy property, it’s also an opportune time to become a landlord. Rents across the GTA climbed 20% in the second half of last year and are expected to remain high through 2023 as demand for housing grows.
Renting is a great way to enjoy a return on your investment almost immediately and ensure a steady stream of passive income – giving you the financial freedom to plan for retirement or other projects. It can be intimidating for first-time landlords however, and that’s where a reputable property management firm can help.
Highgate Property Management has been assisting GTA landlords for over three decades, providing a full range of services including tenant vetting and screening, maintenance, repairs, rent collection, dispute resolution, and more. Our friendly and knowledgeable team takes care of everything so landlords can enjoy their investment without any headaches or hassles. Contact us today to find out more or schedule an appointment.
