The real estate market in Ontario has been closely watched by experts and prospective buyers alike. With recent trends and indicators pointing towards a slowdown in the market, buyers need to be aware of the forecasted trends for the near future.
According to predictions by various banks and real estate firms, home prices are expected to drop by up to 25% by the end of 2023. This price drop is expected to be more pronounced in provinces outside of Ontario, with smaller cities like London, Kitchener Waterloo, Barrie, and Georgian Bay Area expected to see a 15% decrease in prices.
TD Economics predicts that “Canada will see the weakest level of home sales since 2001 this year, which they attribute to the poorest affordability level since the late 80s and early 90s.” Economist Rishi Sondhi forecasts that home sales “will reach their bottom sometime in early 2023 after declining 20% from peak to trough”. TD also sees average home prices in Canada bottoming out early this year.
One of Canada’s largest real estate firms, ReMax, forecasts that prices in the Greater Toronto Area will decline to their 2021 levels, a roughly 11 per cent drop from the average this year. The CMHC also predicts that the average sale price across Canada will continue to decline until the second quarter of 2023.
The reasons given for these predictions include rising interest rates, a slowing economy, and high house prices. Additionally, household income-to-house price ratios are also a factor, as well as an increasing supply of housing leading to higher levels of defaults.
Despite these factors, most Canadians remain optimistic about investing in real estate. According to RE/MAX, 73% of Canadians think homeownership is one of the best long-term investments they can make. However, the same report shows that 67% of Canadians are less inclined to buy in the first half of 2023, while 62% are less inclined to sell in that time frame.
While the market may see some decline in prices, it is essential to note that this does not necessarily mean that buying a home in Ontario will become more affordable. The housing market in Canada has seen an increase in the real estate housing supply, but many homeowners are opting to wait rather than sell, which can offset any price decrease.
In conclusion, the forecast for the real estate market in Ontario and across Canada suggests a potential decline in home prices, but buyers need to be aware of the broader economic factors at play. While some may see a decrease in prices as a positive development, affordability may remain an issue for many prospective buyers in the near future.