Toronto Market Continues To Moderate

Detached Homes

As reported last month, the Toronto market began to show signs of ‘topping’ by the middle of March, as prices for detached homes fell as compared with February. At that time, it did not appear that this was the start of a downtrend, and the trend so far in April seems to be confirming this. As shown in the chart below, detached prices did, indeed, fall in March, and they are bouncing back in April. While this is welcome news, it’s probably not signaling a return to rising prices. More likely, it means that the market has reached a plateau. For perspective, detached prices are still more than 15% higher than this time last year, and last spring was no slouch. So we still have an amazingly strong market for detached homes in Toronto.

Condominium Apartments

Similar to detached homes, condominium apartments are continuing to display a moderating trend through the first half of April. After increasing slightly in March, condo prices are decreasing slightly so far in April. So prices have stopped going up quickly but aren’t falling either; basically another plateau.  Condo prices are about 15% higher than last April, and about 30% higher than at the beginning of 2021, so we’ve had a pretty good run.

As inflation continues to rage and interest rates continue to rise, we will definitely see some downward pressure on prices over the coming months, though perhaps not in the immediate future. With any luck, inflation will start to ease later this year and interest rates won’t have to go as high as they did in the 80’s. The best-case scenario would be a gradual decline in prices over the second half of the year followed by a return to growth (albeit much slower) next year.