Toronto just saw the worst year for home sales in 23 years

Roughly 66,000 homes were sold in 2023, the lowest sales recorded since 2000. By comparison, home sales reached a record 121,000 during the 2021 real estate frenzy. 

Toronto-area real estate sales hit a 23-year low as the market took a significant hit last year from high interest rates and a slowing economy.

The total number of home sales reached 65,982 in 2023, according to data from the Toronto Regional Real Estate Board (TRREB), the lowest sales recorded since 2000 — around when Toronto's population was two-thirds its current size. Even during the 2008 financial crisis, homes sales hit 74,500. By comparison, home sales reached a record 121,700 during the 2021 pandemic-era real estate frenzy when buyers jumped into the market taking advantage of historically low interest rates.

The number of GTA home sales in 2023 represent a 12 per cent dip compared to 2022, the report said.

"We hit a record number of sales in 2021 and last year we came in shy of 66,000. It really illustrates the impact that higher borrowing costs have had since March 2022," said TRREB chief market analyst Jason Mercer. "There is a real affordability challenge and make no mistake many want to purchase a home whether they've lived here their whole life or moved here recently. But the higher interest rate environment has been a real road block."

Despite an uptick of new listings during the spring and summer, the number of new listings also declined by 6.6 per cent year-over-year in December. The surge of new listings earlier in the year stemmed from renewed activity in the spring when the Bank of Canada indicated a rate hike pause, Mercer said.

"When the market picks up, that's when people want to put their home up for sale," he added. "There was also the potential of rate cuts coming at the end of 2023, which never came to pass." Instead, the Bank of Canada resumed two more rate hikes in June and July, dampening sales activity into the fall.

"Not only did interest rates jump higher, hurting affordability further, but there was also a psychological hit," Mercer said. "People are really taking a wait-and-see attitude until the Bank of Canada signals or begins cutting rates."


The average selling price for all home types in 2023 was $1,126,604, representing a 5.4 per cent decline compared to 2022. In 2000, the last time sales numbers were this low, the average price of a home was $243,000.

On a seasonally adjusted monthly basis, the average selling price edged up by almost $3,000 last month compared to November, amounting to an average selling price of $1,084,692 for December.

The average price for detached, semi-detached and townhomes all increased year-over-year by 2.5 per cent, 1.7 per cent and 5.5 per cent, respectively, while condos saw a 3.1 per cent decrease. It's been a challenging year for the condo market, which is largely driven by investors, many of whom are over-leveraged and have been selling their units at discounted prices.

While overall demand for housing remained buoyed by record immigration in 2023, the report said, more of this demand was pointed at the rental market.

"In the condo market, which offers a lot of rental supply, or purpose-built rental there have been extremely tight conditions, low vacancies and competition creating a strong upward pressure on prices," Mercer said. "If we continue to see record population growth at record pace there will be continued pressure unless more supply comes to market."


There is some relief on the horizon. Economists forecast that the Bank of Canada could begin to cut rates by April, allowing for renewed buyer interest. It could revive the market come spring, Mercer said.

Already bond yields are trending down resulting in declining interest rates on five-year fixed mortgages, he said, which points toward the expectation that the Bank of Canada will cut rates in the first half of 2024.

"Would-be homebuyers need rates to come down by a certain amount in order for them to enter the market," Mercer said.

 "They're still waiting to see what happens, so market activity really depends on when the bank will cut rates and by how much."