Why you should view homebuying over the big picture and long term
February 13, 2023
As we near the end of the first month of 2023, we can begin to look forward to improving market conditions and brighter, warmer and longer days.
Indeed, last year wasn’t the easiest for prospective homebuyers, as higher interest rates, concerns for the economy and inflation conspired to impart a chill over the real estate market.
According to the latest Royal LePage House Price Survey, for example, the aggregate price of a home in Canada decreased 2.8 per cent year-over-year to $757,100 in the fourth quarter of 2022. This was the first such decline recorded since the end of 2008 during the global financial crisis. On a quarter-over-quarter basis, the aggregate price of a home in Canada decreased 2.3 per cent – the third consecutive quarterly decline, though the smallest of the year.
But as we often discuss on nexthome.ca, you should view real estate locally, over the long term and even by property type. Case in point: Those Royal LePage numbers are for Canada overall, and of course when you buy a home, you don’t buy a national market; you buy one property on one street in one location.
For the GTA, specifically, the aggregate price of a home decreased 4.6 per cent year-over-year to $1.06 million in the fourth quarter of 2022. On a quarterly basis, the aggregate price decreased 2.7 per cent; the third consecutive quarterly decline recorded.
Broken down by housing type, the median price of a single-family detached home decreased 6.7 per cent year-over-year to $1.32 million in the fourth quarter of 2022, while (take note, Condo Life readers) the median price of a condominium increased 2.7 per cent to $683,100.
Reasons for optimism
Again, perhaps not spectacular numbers, but when we take a longer view, we get a different picture. The Toronto Regional Real Estate Board reports that the average aggregate selling price for 2022 was $1.18 million – up 8.6 per cent compared to $1.09 million in 2021. And underlining the need to examine specific property types, condo prices actually finished 11.3 per cent higher for the year.
Looking at specific markets, aggregate home prices for 2022 increased four per cent in Oakville, and seven per cent in Vaughan, according to Royal LePage.
For all the talk of doom and gloom, single-digit quarterly declines in some categories don’t seem so tragic.
Indeed, as our Outlook 2023 Special Report discusses, there are reasons to be optimistic, even positive, about the road ahead this year and into 2024 and beyond.
If you look at the big picture, long term.
About Wayne Karl
Wayne Karl is an award-winning writer and editor with experience in real estate and business. Wayne explores the basics – such as economic fundamentals – you need to examine when buying property. firstname.lastname@example.org