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Will Toronto Prices Bounce Back This Fall?

Market Update

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08/28/23

Freehold Homes

(detached, semi-detached and attached)

Toronto house prices have fallen by about 14% since May, very similar to what happened last summer. Last fall, prices remained flat through the rest of the year and didn’t start to recover until February. This year, we can hope for prices to bounce back in the fall for a couple of reasons:

  1. Interest rates were increasing rapidly last year, and it was far from clear that the fall in house prices was over. It took several months of stable prices to convince buyers the correction was over and to return in force to the market. This year, while we may yet see higher interest rates, we are almost certainly near the top.
  2. The inflation rate is much lower than last year. There is a lot of optimism that the battle against inflation can be won without a severe recession.
  3. The demand for housing is huge, simply because immigration is adding people more quickly than we are building housing to accommodate them. This situation is unlikely to improve any time soon, and will both buffer any fall in prices and boost any increases.


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Condominium Apartments

Prices for condominium apartments in Toronto have followed a similar trend as for houses. After peaking in May, condo prices have fallen by about 7%. As for houses, it’s likely that prices will improve in the fall, though any bounce will probably be muted.


Buying a home for the first time? You’ll want to check out these related blog posts.


Inventory Levels

The inventory of both homes and condos for sale increased sharply in July. This is consistent with the falling prices, and the elevated inventory levels are most likely continuing in August. If prices bounce back over the next 2-3 months, this should coincide with a fall in inventories.

Bottom Line

Prices have fallen steeply over the summer. We’ll know within the next 2-3 weeks whether they will bounce back in the fall as we expect.

Looking to buy a home this fall? As West Toronto real estate agents with decades of experience, we can help you accomplish your dreams! Click here to send us an email or call 416-769-6050.

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