Real Estate

Ontario Housing Market Outlook 2023

Ontario Housing Market Outlook 2023
Written by
  • Samson Solomon
| Sep 19, 2023
Reviewed, Sep 21, 2023

Ontario Market Report Summary

  • The benchmark single-family home in Ontario increased by 1.9% year-over-year to $993,500 in August 2023.
  • Ontario’s benchmark townhouse/multiplex price increased by 0.4% year-over-year to $726,200 in August 2023.
  • The benchmark condo price in Ontario decreased by 1.7% year-over-year to $647,000 in August 2023.
  • Ontario’s benchmark composite home price increased by 1.0% year-over-year to $908,000 in August 2023.
  • The average rent for an apartment in Ontario increased by 10% year-over-year to $2,496 for August 2023.

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Ontario Housing Market Outlook

Data from the Ontario Real Estate Association (OREA) indicates that the average price of resale residential homes sold across Ontario in August 2023 was $908,000, an increase of 1.0% compared to a year ago. 

With a sales-to-new-listings ratio (SNLR) of 47%, Ontario has remained in a balanced market each month this year since February.

Verbatim: What local experts from the Ontario Real Estate Association (OREA) say about Ontario’s provincial housing market:

Residential sales activity reported through the MLS in Ontario numbered 13,802 units in August 2023. This was a minor decrease of 3.6% from August 2022. Home sales were 26.2% below the 5-year average and 26.3% below the 10-year average for the month of August. On a YTD  basis, home sales totalled 119,455 units over the first 8 months of the year. This was a large decline of 14.2% from the same period in 2022. Nationally, home sales activity was up by 5.3% from year-ago levels in August 2023.

The average price of resale residential homes sold across the province in August 2023 was $832,376, edging up 0.3% from August 2022. The more comprehensive YTD average price was $881,982, a decline of 8.5% from the first 8 months of 2022. The national average price, by comparison, marked a small gain of 2.1% on a YoY basis to $650,140 in August 2023. The number of new listings on MLS in Ontario saw an increase of 9.9% from August 2022. There were 29,149 new residential listings in August 2023. New listings were 1.5% above the 5-year average and 3% above the 10-year average for the month of August. Active residential listings numbered 43,565 units on the market at the end of August, a sizable gain of 13.2% from the end of August 2022.

Active listings were 18.7% above the 5-year average and 6.6% below the 10-year average for the month of August. Months of inventory numbered 3.2 at the end of August 2023, up from the 2.7 months recorded at the end of August 2022 and above the long-run average of 2.6 months for this time of year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity. The dollar value of all home sales in the province in August 2023 was $11.5 billion, down modestly by 3.3% from the same month in 2022.

Month-over-Month Market Expectations

The sales to new listings ratio (SNLR) is the number of home sales compared to new listings. An SNLR under 40% suggests a buyer’s market where buyers have the upper hand and more negotiating power. An SNLR between 40% and 60% is a balanced market, while an SNLR of over 60% is considered a seller’s market. 

Market Expectations Breakdown By Property Type

Changes To Regional Prices by Property Type

Historical Changes To Benchmark Prices In Ontario By Property Type

Historical Changes To Benchmark Prices In Ontario Cities

Last 10 Years of Monthly Changes to Ontario’s Composite Home Price

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    Who’s Buying Ontario Real Estate?

    Until recently, the primary demographics driving demand in Ontario’s residential property market were those looking to upsize their homes, foreign investors looking to purchase an investment property in one of Canada’s university towns, professionals who recently immigrated to Canada in the past 5 years, and out-of-province migrants advancing their careers in Toronto while maintaining a commutable distance in Ontario. 

    With the passing of the omnibus Bill C-32 legislation, including the foreign buyers’ ban and anti-flipping tax, the Ontario homebuyers’ demographic may be shifting away from foreign investment. However, it remains to be seen whether efforts to limit foreign buyers in Ontario will have an impact; according to Statistics Canada, foreign investors make up less than 5% of homeowners in Ontario’s largest cities’ total homeownership.

    Multi-property Investors

    According to a report by Teranet, investors and multi-property owners accounted for over 25% of Ontario’s homebuyers in 2021, particularly in Ontario, where the numbers were even higher. A report by StatsCan, which tracks the concentration of residential properties owned by investors across Canada, said that investors in Toronto own 29,530 out of the city’s 34,180 condominium apartments, a rate of 86.4% – more than twice the provincial average of 41.9%. Greater Toronto is provincially and nationally the largest real estate market division.

    First-time homebuyers have traditionally accounted for more than half of all purchases. However, that share has slowly declined, reaching a low of 46.8% in June 2021, with real estate investors and multiple property owners picking up the difference. 
    According to Statistics Canada, multiple property owners represent 15% of owners in BC and Ontario and 20% in New Brunswick and Nova Scotia but hold 30% and 40% of existing housing stock, respectively.

    Upsizing Buyers

    Upsizing by buyers has driven Ontario’s demand for single-detached homes, which showed the highest year-on-year price increase of all property types from $697,400 in February 2020, which is still more than 35% lower than today’s price at $945,000. Upsizing buyers continued to explode some of Ontario’s most active real estate markets, like those in Toronto, Ottawa,  Mississauga, Hamilton-Burlington, Brampton, London, Windsor and Oakville-Milton. You’ll notice that most of Ontario’s 7-digit home valuations are centred in and around the Greater Toronto Region.

    Immigration & Out-of-province Migration

    While the pandemic saw thousands of homebuyers leaving urban areas searching for more space and affordable housing, new immigrants are making Ontario homes a continued surge.  Although many Ontarians continue to leave Ontario due to housing affordability limitations, many continue to move here. According to this report by Re/Max, the federal government expects to bring an additional 2 million new immigrants to Canada – many of whom will still choose to settle in Toronto, Vancouver and Montreal.

    First-Time Homebuyers

    Getting a mortgage in Ontario as a first-time buyer can be challenging for many. Ontario has some of the highest property tax rates for a large city, with over 1% of property value in most smaller communities and larger urban cities such as Kingston, Ottawa and London. 

    While programs like the First Time Home Buyer Incentive are in place to help people afford homes in Ontario, this has yet to do much to offset affordability as the stress test makes it harder to qualify. At the same time, the Bank of Canada keeps rates elevated – adding a barrier to qualifying for a home without a combined household income over $150,000. 

    Given the slowdown over the last 12 months in home prices, Ontario remains a difficult market to purchase a first home without outside financial assistance. 

    Final Thoughts

    Ontario’s property market is set to remain strong as increases are expected for the remainder of 2023. The average home price in Ontario has dropped significantly since last year. However, this comes after months of record consecutive price rises during the pandemic and one of the most intense periods of price appreciation the province has ever seen. 

    While the property market appears to be shedding value in Ontario, it’s important to remember that this is relative to a long period of superheating in the area. 

    If you are looking for a home in 2023, expect an imminent turnaround in the housing market over the next few months. Contact our knowledgeable and commission-free mortgage experts at nesto to help guide you through the home-buying process.

    Market Rents Summary

    The Canadian rental market experienced a record-breaking surge in August, with average rents soaring to an all-time high. This trend indicates a significant shift in the country’s rental landscape, with prices continuing to escalate despite increasing rental completions. Below, we delve into this trend with data from and Urbanation, examining the changes across various provinces and cities.

    National Overview: A Record-Breaking Surge

    August witnessed a remarkable rise in the average asking rents in Canada. The average rent reached an all-time high of $2,117, marking a monthly increase of 1.8% and an impressive annual growth rate of 9.6%. This trend is a testament to the escalating demand in the rental market as the country struggles with a severe rental housing shortage.

    Over the past three months, the Canadian rental market experienced a significant 5.1% increase in asking rents from May to August. This equates to an increase of $103 monthly, putting additional pressure on renters. Shaun Hildebrand, President of Urbanation, shed light on this trend, noting that unlike in the U.S., rent inflation in Canada has stayed the same, even with rental completions reaching their highest levels in decades. This gives an idea of the dire rental housing shortage across the country and the impact on rental demand as the population expands rapidly.

    Quebec’s Rental Market: Steady Climb

    In Quebec, the rental market is also experiencing a steady rise. The province, known for its rich culture and picturesque landscapes, has seen average asking rents grow by 24.0% annually to $888 monthly for shared units. The surge in rental prices in Quebec is mainly attributed to the robust demand for rental housing, driven by the province’s growing population and strong economy.

    The Greater Montreal area, in particular, has seen a significant rent increase. Despite the city’s efforts to provide affordable housing, the average asking rents have surpassed the $2,000 mark for the first time, reaching $2,001. This has increased financial strain on renters, particularly those with lower incomes.

    Ontario’s Rental Landscape: The Expensive Side of Living

    Ontario, Canada’s most populous province, is familiar with high living costs, particularly in the rental market. The province saw an annual rent increase of 7.5% to an average of $1,040 for shared accommodations. This trend is particularly prevalent in the Greater Toronto Area (GTA), where the average monthly rent has reached $2,898.

    Despite being one of the country’s most expensive cities, Toronto posted a below-average annual rent increase of 8.7%. Nevertheless, the cost of renting in Toronto remains high, while rental vacancies are at a two-decade low. This increasing unaffordability and low availability is a significant concern for many residents and employers looking to attract talent.

    Alberta’s Rental Market: Leading in Growth

    Alberta’s rental market has grown the fastest among Canada’s largest cities. Calgary, in particular, leads in rent growth, recording an enormous 17.3% year-on-year increase in August, bringing the average rent to $2,068 for purpose-built and condominium apartments.

    Despite the economic challenges faced by the province due to the fluctuating oil and gas industry, Alberta’s rental market has remained resilient. The significant rent rise in Alberta is primarily due to the province’s steady rental demand, driven by its growing population and recovering economy.

    British Columbia’s Rental Market: High Prices Amid High Mountains

    British Columbia (BC), known for its stunning landscapes and high living costs, has also witnessed a considerable increase in rental prices. In BC, average asking rents for shared accommodations increased by 17.7% annually to $1,150 monthly.

    Vancouver, BC’s largest city, continues to be the most expensive city in Canada, with an average monthly rent of $3,316. However, Vancouver posted a below-average annual rent increase of 7.3% and even saw a 0.7% decrease in average rents monthly. This indicates that the city’s rental market may be stabilizing, although the cost of renting remains high.

    The Time to Purchase a Home is Now

    In conclusion, the Canadian rental market has been experiencing an unprecedented price surge, with rents increasing faster than ever. This trend and the ongoing rental housing shortage have pressured renters nationwide.

    Given these circumstances, it might be an opportune time to consider purchasing a home. Despite the high upfront costs, owning a home can offer long-term financial benefits and stability, especially in a market where rents are skyrocketing. Thus, starting planning and taking the necessary steps toward homeownership is vital. After all, a home is not just a place to live but also an investment for the future.

    Rental Cost Escalation Due To Housing Affordability Constraints

    This past month, CMHC released some quantified findings from their 2022 Rental Market Survey. Their experts indicated rental markets tightening in many urban centres and created two different measurements to show the lack of housing supply in the country.  You can read the full report, while the data can be easily illustrated in two charts.

    Share Of Affordable Units By Major Urban Centre

    The first indicator measures the share of units that are affordable (whose rent represents less than 30% of pre-tax income) for the lowest income group of renters, those in the lowest income quintile (20%).

    Chart showing share of affordable rental units by cities in Canada

    *Kitchener, Waterloo and Cambridge Source: CMHC

    Change In Average Rent For A 2-Bedroom Unit

    The second indicator allows us to measure the average rent for newly rented units, that is, apartments whose occupants arrived in the last 12 months. This new statistic is very relevant because it allows us to compare it with the average rent for units occupied for more than a year.

    Chart showing change in average rental costs for 2 bedrooms in major cities around Canada (new and already leased) in 2022.

    Source: Provincial governments, CMHC Rental Market Survey (2022)

    Each $100K in mortgage balance costs an average of $601.11 per month on nesto’s lowest fixed 5-year rate at and $641.25 per month on nesto’s lowest variable 5-year rate at .  Rates used for calculation are those offered on insured purchases with less than a 20% downpayment on a 25-year amortization.  Each 0.25% change in mortgage rates impacts the monthly payment by $15 to $17 on a 25-year amortization.

    Rental Prices Compared to Other Canadian Cities

    Rental Prices Compared to Other Provinces and Nationally

    Average Rents by Housing Type

    Rental Growth by Housing Type

    Frequently Asked Questions

    Is the Ontario housing market going to crash?

    Ontario home prices are currently sagging due to surging mortgage rates. Ontario prices remain some of the highest in the country, and with the current Bank of Canada rate hikes, mortgages have been harder to qualify for due to the stress test. Ontario prices will recover quicker than in other areas once mortgage rates decline back to manageable levels for homebuyers to purchase or homeowners to refinance their homes. 

    Will Ontario’s housing prices increase in 2023?

    Although currently declining, many experts believe that a turnaround is imminent.  Buyers are waiting on the sidelines for the opportune time to make a move. 

    How do I get approved for a mortgage in Ontario?

    To get approved for a mortgage in Ontario, look at Ontario mortgage rates and see how much you can afford. This will give you an idea of what it will cost to buy a home in Ontario at today’s prices and rates. You can check out what you need to get pre-approved for a mortgage or start by getting a quote

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