Ontario Housing Market as of May 2023
Ontario home prices have been steadily creeping upwards as limited supply, coupled with strong demand, has helped push up the price of homes in Ontario. For the month of May 2023, Ontario’s average home price was $928,897, up 2% month-over-month. That’s the fifth consecutive month that Ontario home prices have risen!
Since the start of the year, home prices have increased by 16%. On an annual basis, home prices in Ontario are still down 1% year-over-year.
The Greater Toronto Area (GTA) housing market, which accounted for 17% of all home sales in Canada for the month of May 2023, continued to see support in home prices this month. The GTA’s average home price for May 2023 was $1,196,101, up 4% month-over-month and down 1% year-over-year. That matches the province’s 1% annual drop in home prices.
Sales activity in many of Ontario’s major housing markets is booming. Home sales in Toronto are up by 24% year-over-year and up 20% from last month, whileOttawa’s housing market is seeing a 5% increase in sales year-over-year, up 30% from last month. Hamilton, Mississauga, and Brampton sales activity is also seeing similar patterns: a year-over-year increase in sales and a strong growth in sales month-over-month.
Looking at Ontario’s major urban housing markets in terms of annual price change for May 2023, Hamilton and London have seen about a 10% year-over-year decrease in average sold prices. Next up was Ottawa with a 6% decrease and Brampton with a 3% decrease. Mississauga’s 1% decrease and the GTA’s 1% decrease matches the province’s average decline.
The average home price in Toronto’s housing market for May 2023 was $1,197,021 for the City of Toronto and $1,196,101 for the GTA. This means that the City of Toronto’s average home price has increased at a slightly higher monthly rate, 7%, compared to the GTA as a whole. Brampton had an average selling price of $1,111,067. Meanwhile, Mississauga home prices increased to $1,140,328.
The Ottawa and Hamilton housing markets remain cheaper alternatives to the GTA’s expensive home prices. Hamilton’s average sold price for May 2023 was $814,082, while Ottawa’s average sold price was $673,697, down 1% from last month. That’s unlike other major housing markets in Ontario, which have mostly seen a rise in prices on a monthly basis. Real estate in London, Ontario, remains relatively affordable, with an average price of $682,561. Oshawa’s housing market had an average price of $855,682
Ontario Housing Market Forecast for 2023
Ontario’s housing market saw a sharp correction in prices in 2022 as Bank of Canada rate hikes brought about rising interest rates, stifling demand. Looking forward, Ontario’s housing market forecast for 2023 depends on a few factors.
A pause in Bank of Canada rate hikes, something that is widely predicted as inflation eases off and as the risk of a recession increases, might even translate into rate cuts this year. Immigration, looking mainly at newcomers and international students, has also been returning to normal levels. More people looking for a home will boost demand. Met with a shortage in housing inventory, a surge in buyers will introduce upward pressure on housing prices.
The federal government banned foreign buyers from buying a home in Canada, starting in 2023. Should interest rates continue to increase, demand will be crippled further.
Ontario’s Housing Market Forecast: Things to Watch
A look at house price forecasts by Canada’s major banks gives us a look at what they predict Ontario house prices will be in 2023 and 2024.
RBC predicts that Ontario home prices will decrease 13.7% in 2023, and increase 2.9% in 2024. RBC also forecasts that home sales in Ontario will decrease by 13.9% in 2023 and increase by 34.1% in 2024.
TD predicts that Ontario average home prices will fall by 13.3% in 2023 before rising a modest 0.8% in 2024. For Ontario home sales, TD forecasts an 8.1% decrease for 2023 and an 18% increase in 2024.