As promised in my last blog, here is my analysis of the latest real estate market report for August 2022, issued by TRREB. The big news is that the average selling price turned upward for the first time since prices started to tank around May of that year.
This post was first published in September 2022. The figures below are from that time, as I summarized them then.
August 2022 residential sales
According to the Toronto Regional Real Estate Board (TRREB), total sales continued their downward trend compared with August 2021, the same month last year.
However, sales saw an uptick of more than 11% from the previous month, July 2022. So, although the yearly picture was still weak, the month-to-month picture had started to improve.
Average selling price turns up in August 2022
Here is the interesting news. The average selling price graph changed course in an upward direction. This was the first time since prices started to tank around May of that year.
It is also interesting that the upward trend showed up in both views, year over year and seasonally adjusted. Prices were up almost 1% compared with August 2021, the same month last year. They were also up over 2% from July 2022, the previous month.
This information is critical to understanding the future trend of the real estate market. I will explain it in more depth towards the end, but first, let us analyze the full report.
Listings and days on market
Year over year, from August 2021 to August 2022, less than 0.7% fewer homes came to the market. Similarly, there was a 28% decrease in the ratio between new listings and sales.
As a result, homes stayed on the market much longer. The increase was a whopping 62%, with homes taking 34 days to sell compared with 21 days last August.
The same trend showed up month to month. Days on market rose 37.5%, from 16 days in July 2022 to 22 days in August 2022 to sell a home. In practice, buyers had more time to look and think, while sellers needed more patience.
Condominium sales market
Year over year (Q1/2021 to Q1/2022), condo sales dropped by 15.6%. Even so, the average selling price of condos showed a giant leap, with a 22.4% increase.
The total number of condos entering the market also saw a slight increase of 0.3%, year over year, while there were 14% fewer sales of the new entries. Speed, though, was a big surprise. It took almost half the number of days to sell a condo, 12 days in July 2022, compared with 23 days in July 2021, a year earlier. This showed buyers’ confidence in taking advantage of the lower prices.
Please note: as first published, the condo figures above refer to first-quarter and July periods, not to August 2022 itself.
Condo rentals and the commercial market
Condominium rental market
Tenants rented 10,110 condo apartments, compared with 12,162. That was a decrease of 2,052 rentals, about 17% (calculated), compared with the same period last year (Q1/2021 to Q1/2022).
The average one-bedroom apartment rent went up to $2,145 from $1,820, an 18% increase, in the same period. Meanwhile, the number of new rental units entering the market was cut in half. There were 16,475 units in Q1/2022, compared with 28,703 units in Q1/2021, the year before.
Commercial market
Commercial sales were down by almost 22% in Q1/2022 compared with Q1/2021, with 307 and 392 sales respectively.
Year over year, first-quarter leasing activity also slowed, with about 6.5M and 8.7M units leased during Q1/2022 and Q1/2021 respectively. The average lease rates for industrial and commercial/retail units rose by 28.6% and 14.4% respectively. By contrast, the average office leasing rate declined by 2%.
As with the condo figures, these rental and commercial numbers are quarterly figures, not August 2022 results.
What August 2022 meant for the months ahead
Coming back to the big question, what was in store for the near future of the real estate market?
No one can predict the future. And it is never easy to predict the market when many variables are at work. On one side, we had the challenge of record levels of inflation. On the other hand, mortgage rates were rising. That was due to the Bank of Canada‘s actions to bring inflation under control.
The Governor of the Bank of Canada was set to speak on Wednesday, September 7, 2022. That announcement would be critical in setting the mood of the market, especially in real estate. Some economists believed that Wednesday’s increase could be the last.
Add to that the reversal of the downward price trend in August 2022. Together, these led me to think we may have seen the bottom of house prices for this period. It could be the beginning of a return to an upward trend. But I hoped it would not lead to multiple offers and price wars as seen recently.
You can see how that announcement turned out in my post on the Bank of Canada’s September 2022 decision. For an earlier comparison, read my April 2022 market trends report. The official monthly reports are on the TRREB website.
Talk to a Mississauga real estate agent
Do you have questions about what the market means for your own plans? Please send me a message or call me directly at 416 908 5600. I am A. Q. Mufti, Sales Representative, RE/MAX Real Estate Centre Inc., Brokerage, and I am always glad to help. If this post was useful, you can also leave a Google review.
Disclaimer: this article was published on 18 January 2025 and reflects the information available at that time. Interest rates, prices, and government programs change, so check the current position before acting on anything here. It is provided for information only and is not financial, mortgage, tax or legal advice. A. Q. Mufti is a registered Sales Representative with RE/MAX Real Estate Centre Inc., Brokerage, Ontario, Canada.
