The Toronto luxury real estate market experienced a marked adjustment in 2022 compared to record levels in 2021. Existing affordability issues brought about by a lack of housing supply were exacerbated by sustained interest rate hikes by the Bank of Canada.
Following a very strong start to the year, home sales trended lower in the spring and summer of 2022, as aggressive Bank of Canada interest rate hikes further hampered housing affordability. With no relief from the Office of Superintendent of Financial Institutions (OSFI) mortgage stress test or other mortgage lending guidelines including amortization periods, home selling prices adjusted downward to mitigate the impact of higher mortgage rates. However, home prices started levelling off in the late summer, suggesting the aggressive early market adjustment may be coming to an end.
There were 75,140 sales reported by the Toronto Real Estate Board in 2022, down 38.2% compared to the 2021 record of 121,639. The number of new listings amounted to 152,873 3 down 8.2% compared to 166,600 new listings in 2021. Seasonally adjusted monthly data for sales and price data show a marked flattening of the sales and price trends since the late summer.
While home sales and prices dominated the headlines in 2022, the supply of new listings continued to be an issue as well. The number of homes listed for sale in 2022 was down in comparison to 2021. This helps explain why selling prices have found some support in recent months.
The average selling price for 2022 was $1,189,850, up 8.6% compared to $1,095,333 in 2021. This growth was based on a strong start to the year, in terms of year-over-year price growth. The pace of growth moderated from the spring of 2022 onwards.