Ontario Housing Market as of March 2023
Ontario’s housing market is stabilizing after a swift correction brought Ontario home prices on a wild ride in 2022. For the month of March 2023, the province’s average home price was $881,946, up 2% month-over-month, the highest that it has been since May 2022. On an annual basis, Ontario’s average home price is still down 16% year-over-year. That’s somewhat better than the -20% year-over-year change seen last month as Ontario’s housing market continues to pick up steam.
Other provinces are also seeing similar growth in home prices. BC home prices are up 2% month-over-month as well, matching the price growth in Ontario. Neighbouring Quebec has seen home prices rise 3% compared to last month. Canada’s average home price rose 4% compared to last month, helped by strong growth in the Prairie provinces.
The Greater Toronto Area (GTA) housing market, which accounted for 17% of all home sales in Canada for the month of March 2023, saw some support in home prices this month. The GTA’s average home price for March 2023 was $1,108,606, up a meagre 1% month-over-month and down 15% year-over-year. That’s slightly better than the province’s 16% annual drop.
Sales activity in many of Ontario’s major housing markets remains lower year-over-year, but has seen significant improvements compared to the start of the year, in large part due to seasonality. Home sales in Toronto are down by 37% year-over-year and up 44% from last month, while Ottawa’s housing market is seeing a 41% decrease in sales year-over-year, up 40% from last month. Hamilton, Mississauga, and Brampton sales activity is also seeing similar patterns: a large year-over-year dip in sales but strong growth in sales month-over-month.
Looking at Ontario’s major urban housing markets in terms of annual price change for March 2023, Hamilton, London, and Brampton have seen a 21% year-over-year decrease in average sold prices. Next up was Oshawa with a 19.5% decrease and Ottawa with a 16% decrease in prices year-over-year. Mississauga saw a 12% decline in prices year-over-year.
The average home price in Toronto’s housing market for March 2023 was $1,054,563 for the City of Toronto and $1,108,606 for the GTA. This means that the City of Toronto’s average home price has slightly decreased compared to last month, while the GTA’s overall average price has increased. Brampton had an average selling price of $1,030,637. Meanwhile, Mississauga home prices increased to $1,036,553. Last month, Brampton’s average home price was higher than Mississauga’s average home price. That is no longer the case in March 2023.
The Ottawa and Hamilton housing markets remain cheaper alternatives to the GTA’s expensive home prices. Hamilton’s average sold price for March 2023 was $793,241, while Ottawa’s average sold price was $636,610. Real estate in London, Ontario, also remains relatively affordable, with an average price of $653,611. That’s up 5% from last month. Oshawa’s housing market had an average price of $813,747, up 6% from last month
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.
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.