2023 Market Outlook
& 2022 Year in Review

A Look Ahead at GTA Housing, Infrastructure and Sustainability

What’s Trending Next

2023 Market Outlook

Hear what TRREB’s Chief Market Analyst Jason Mercer has to say about the demand for housing and where prices are heading in 2023.

What’s Next for Interest Rates

Tune in for an outlook on interest rates and how rate hikes are impacting buyers’ housing choices.

Renting in the GTA

Learn why affordability pressures in the homeownership market drove higher rental prices and increased competition.

The Latest Buying Intentions

Find out the polling results on buying intentions, including insights into first-time buyers.

Video Transcript
Video Transcript
Video Transcript
Video Transcript
28%

of respondents said they will likely buy a home in 2023

Up by

2%
46%

of first-time buyers said they would likely buy a home

Up by

7%
63%

of likely purchasers said they were impacted by the mortgage stress test

39%

of homeowners said they would consider listing their home in 2023

Up by

4%
New Consumer Polling

Buying Intentions

New consumer polling results, conducted by Ipsos, reveal buying intentions are up. The results from the late fall of 2022 highlight an increased demand for homeownership through the year.

First-Time Buyers

A relatively resilient labour market and downward trending fixed mortgage rates will prompt a gradual increase in homebuying activity. This means more first-time buyers will be confident to make a purchase. The polling results revealed the number of first-time buyers likely to purchase a home is up over 2021.

Impacting Buyers

The polling results also showed that the OSFI stress test is having more impact on homebuying intentions than ever before – the highest since 2019. Most respondents who said they were impacted indicated that the stress test was making them consider purchasing a different type of home, location, and/or price point.

Listing Intentions

While inventory levels are expected to remain low historically, recent Ipsos polling suggests that the share of homeowners considering listing their home for sale may increase in 2023. More importantly, this increase in listing intentions is entirely driven by those who say they are very likely to list.

What our Leaders are Telling TRREB

"Before property developers construct their next project, they need a long-term vision with an eye on environmental sustainability from raw materials to green designs that will benefit, not burden, future generations."

JOHN DIMICHELE, TRREB CEO

"Homeowners also play a key part by making choices and changes that protect and conserve resources while optimizing energy in their homes. There are incentives and a grant program that not only help achieve this, but also fight climate change."

Paul Baron, TRREB President

"Everyone deserves a safe and affordable place to call home. This is not a luxury, instead is an essential human right."

Right Hon. Justin Trudeau, Prime Minister of Canada

"Our government introduced a series of housing supply action plans that support our goal of building 1.5 million new homes by 2031."

Hon. Steve Clark, Minister of Municipal Affairs and Housing

"The province’s Transit-Oriented Communities Program will create vibrant, mixed-use communities that are connected next to or within a short walk to public transit."

Hon. Kinga Surma, Minister of Infrastructure

"From new highways to transit expansions, we’re investing more than $86 billion over the next 10 years in transportation projects across the province."

Hon. Stan Cho, Associate Minister of Transportation

"I have a strong mandate to build more housing, get transit built, and make life more affordable for all who choose to call our city home."

John Tory, City of Toronto Mayor
2022 IN REVIEW

Year in Review: 2022 Market Stats

Homes Sales

The housing market started off strong in 2022, but GTA home sales trended lower in the spring and summer as aggressive Bank of Canada interest rate hikes further hampered housing affordability.

New Listings

With a drop in GTA home sales, the number of new listings hitting the market also dipped. The number of homes listed was down in comparison to 2021. This helps explain why selling prices found some support in the latter months of 2022.

Average Price

The average selling price for 2022 was up over 2021. This growth was based on a strong start to the year. As more prospective buyers were faced with higher mortgage rates through spring 2022 and onwards, home selling prices adjusted downward.

Detached Homes

Low inventory for GTA detached homes plus strong competition between buyers continued to drive up the average selling price. In 2022, buyers experienced a price increase of 7.4% when compared to 2021.

Semi-Detached Homes

Similarly to detached homes, semi-detached homes in the GTA also featured strong competition between buyers, pushing the average price to climb higher in 2022. The average selling price of a semi-detached was up 9.8% over 2021.

Condos

Sales in the condo market were slower in 2022 as some first-time buyers moved to the sidelines due to higher borrowing costs. Many of these would-be buyers shifted to the condo rental market in the short- to medium-term to meet their housing needs.

Total Sales in 2022

75,140
38.2% decrease from 2021 (121,639)

New Listings

152,873
8.2% decrease from 2021 (166,600)

Average Price 2022

$1,189,850
8.6% increase from 2021 ($1,095,333)

Detached Sales

33,568
Average Price $1,545,428

Semi-Detached Sales

6,896
Average Price $1,182,970

Condominium Sales

21,323
Average Price $758,066

200,000

new GGH immigrant targets

30%

of people worked from home during the pandemic

6.79 million

Daily commuters

2.19 million

Transit trips

4.61 million

Car commuters

1.4 million

lower-income households could spend as much on transit and transportation as on food. This is up by 94%

Transportation and Infrastructure in the Greater Golden Horseshoe

The Greater Golden Horseshoe (GGH) is home to over two-thirds of Ontario’s population and jobs. Given the region’s importance to the prosperity of the province, it’s critical that our transportation infrastructure keeps pace with future population and economic growth requirements. That’s why TRREB partnered with the Canadian Centre for Economic Analysis to unpack where transit and transportation infrastructure stands today and what we need to build a better tomorrow.

READ THE RESEARCH

Growing Population

The population of the GGH is expected to grow to 16.9 million residents by 2051. This rapid increase is expected to place more pressure on the GGH’s transit and transportation networks. To meet the growing needs of the region, Ontario plans a large expansion of these networks over the next 30 years based on pre-pandemic trends.

Planning for the Future

The GGH transportation plan includes expanding GO train service to provide 15-minute all day service across the network; expansion of subway, light rail transit, and bus rapid transit lines; and increasing highway capacity through widening existing corridors and adding new connecting highways.

However, it is critical to understand how Ontario’s transportation plan in the GGH will meet the needs of its residents in the face of changing immigration policies and evolving workplace trends such as working from home.

Returning to the Office

There are two main pressures facing Ontario’s transportation network. First, the GGH has limited capacity to provide service for transit and transportation. Second, work-from-home trends are also evolving. Many employees are returning to their usual place of work, at least on a part-time basis, and the demand for transit is the primary driver of weekday commuting.

Increasing Demand of Commuters

If the pandemic work-from-home rate of 30% returns to the pre-pandemic level of 7%, the increase in demand for transportation would be 122% by 2051. But it is unlikely that all employees will return back to the office. If only 20% of the workforce continues to work from home, by 2051, the GGH can expect to see an increase in commuters.

Commuting Costs Are Growing

The option to work-from-home is possible for only some occupations, such as professional services. For other occupations, such as services, manufacturing, or health care, work-from-home is not possible. This has implications for commuting costs and affordability for those groups.

Taking Action

Municipalities will experience growth and demand differently, and long-term policies such as immigration and work-from-home trends could significantly put our transportation networks at risk.

Our transit systems must meet the needs of people to support the overall well-being of the region and offer access to economic opportunities. The GGH needs more housing, transit, transportation, and economic planning over the long term to ensure efficient use of infrastructure investment.

Key Findings from the New Homes, Commercial and Condos

Explore the commercial, new homes and condo markets with new research from Altus Group. See how these market segments shaped up in 2022, plus discover the 2023 outlook and what is forecasted when it comes to demand.

Climbing Commercial Market Activity

After multiple interest rate hikes in 2022 and concerns of a possible recession, commercial transaction activity in the GTA rose slightly, jumping 2% over the previous year to 2,290 transactions from January through September 2022.

Increasing Supply for Office Spaces

Looking at January–September 2022, availability rates in the GTA office market climbed slightly when compared to 2021. This occurred as the hybrid model of work remained popular and a new supply of office space was added. Towards the end of 2022, there were 28 office projects underway in the GTA, occupying 6.1 million square feet of office space, with an availability rate of 42.6%.

Heightening Interest for Industrial Market

Industrial supply dropped slightly from July to September 2022, tightening even further when compared to 2021. This means any new industrial product coming to the market is being rapidly swept up as investors continue demanding more space.

Commercial Market Outlook

Moving into 2023, investor confidence is expected to remain strong in the GTA market. However, it will be tempered with some cautiousness because of high interest rates and the threat of a possible recession.

Closing in on New Homes

Total new homes sales shrank by 44% for the first 11 months of 2022 compared to a year earlier. When it came to the new condo market, there was a one-third drop in sales through November 2022 when compared to the near-record high in 2021. Single-family sales, on the other hand, were the main drag on total sales with a 67% decline due to supply shortages and affordability woes.

New Homes Outlook

In 2023, new homebuyers and builders are expected to remain cautious in the face of economic headwinds. Demand for new condos is expected to remain at current levels throughout the year. A lack of available supply and continued affordability challenges are expected to keep new single-family new home sales constrained.

New light-duty electric vehicle sales standards:

20% by 2026

60% by 2030

100% by 2035

By 2030:

1 out of 3 vehicles sold in Ontario will be electric

Helping Homeowners and Tenants in Multi-Unit Residential Buildings Access EV Charging

Canadians and businesses are increasingly interested in making the switch to electric vehicles (EV). Recent surveys continue to show that Canadians intend on purchasing an EV as they become more affordable. As EV purchases continue to grow, residents will factor in the availability of home charging into their housing decisions. This means municipalities and the real estate sectors need to be prepared to offer easily accessible charging.

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Supporting EV Charging

Over the next decade, property developers will need to construct new buildings with the electrical infrastructure to support EV charging while owners of existing buildings will need to pursue retrofits – especially for multi-unit residential buildings (MURBs).

Given that MURBs make up 30% of Canadian homes, and closer to 40% of homes in cities like Toronto, preparing and future-proofing these buildings should be a priority. Without targeted investment and policy action, many residents may not find a condo or apartment that suits their charging needs and be unfairly excluded from the EV market.

Growing Trends for EVs

More and more drivers are choosing electrical vehicles in Canada. In Q1 to Q3 2002, 1 in 16 new vehicles sold in Canada were EVs. But this is expected to increase significantly with the federal government’s sales standard for light-duty vehicles which will set the number of EVs sold by automakers.

Going Electric for the Environment

Since 2019, Ontario has pulled ahead of Quebec and British Columbia as the leading market for EV adoption with almost 20,000 new EV registrations in 2021.

The economic and environmental benefits of EVs are helping drive these trends among consumers. Across personal vehicles, EVs in Canada are already cheaper over their lifetime than gas-powered equivalents, except for pickup trucks. This is largely because the average fuel and maintenance costs are significantly lower. Upfront sticker prices of EVs are also set to decline over the next few years, catching up with gas-powered vehicles as soon as 2026.

Expanding Public Charging

With EVs taking a major presence on Ontario’s roads over the next decade, the charging options for drivers need to expand significantly to keep up with demand and prepare for future growth. The federal, Ontario and municipal governments have made strides to support EV chargers, contributing almost $2 billion to expand public charging that will complement home charging.

Plugging in at Multi-Unit Residential Buildings

For owners of single-family homes, with their own private parking spot and electrical panel, the process of installing electrical infrastructure for chargers is relatively simple.

Retrofitting MURBs are more challenging and costly. Condominium dwellers and residential co-ops need to collectively agree to change the building’s common electrical infrastructure. For MURBs to implement EV-ready retrofits at the scale and speed that is required, governments at the federal, provincial, and local levels need to step up and help reduce the upfront costs of these renovations.

Preparing for the Rapid Growth

Developers and building owners should prepare today for the rapid growth of EVs on the road. Canadians clearly see the benefits of electric vehicles. By planning ahead to provide charging, the real estate sector can cost-effectively help people reap the benefits of going electric and help Canada reach its net-zero climate commitment.

The Real Estate Industry’s “Crisi-tunity” Moment

Real estate and housing are something we are literally all in together; governments, industry and consumers alike. But if you look carefully, you will see that no one is actually in charge of it. Today, we find ourselves in an environment that so rich with complicated and interrelated problems that many people (both here and around the world) are calling real estate and housing a crisis.

Leading Innovation

Industry has a massive opportunity and arguably a responsibility to lead through innovation. Industry understands the complexity and interdependencies of the problems, and when it applies novel thinking, can deliver new capabilities through open innovation and entrepreneurial business models and transform crisis into opportunity.

Transforming the Industry

Companies co-founded at R-LABS to date include R-Hauz (r-hauz.ca), which is solving the missing middle through off-site prefabricated housing solutions, like laneway homes and mass timber avenue townhomes that conform to city planning frameworks. OneClose (oneclose.ca) is solving interim occupancy interest for new condominium owners by allowing them to lock into a mortgage at the time of occupancy. RIOS (onrios.com) is improving the efficiency and flow of new housing supply, beginning with a new condominium assignment fulfillment service.

Learn more about R-LABS and their journey of innovative growth and transformation.

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