A Closer Look at Toronto Real Estate Prices For May 2023 | Key Hidden Insights Revealed!

A Closer Look at Toronto Real Estate Prices For May 2023 | Key Hidden Insights Revealed!


Toronto real estate prices have once again soared in May, but hey, let’s not state the obvious!

We all know real estate prices have been climbing. Instead, we spent time digging deeper into the data and we have better insights for you. 

 In this video, we’ll lay these out to you so get a more complete picture of what’s going on in the world of Toronto real estate. Lets’s dive it.

Is There A Housing Supply Issue?

Let’s talk about this housing supply issue that’s all over the news lately.

Yes, it’s true that supply has been lower than demand in the past few months and we’re playing catch up. It’s also true that on a year over year basis, demand continues to outpace supply.

But let’s clarify things here. We’re comparing the current situation in May of 2023 to last year May 2022, when there was a peak fear among buyers causing them to put purchases on pause, and sellers rushed to avoid further price drops.

You’ll see that the sales-to-listings ratio is much more balanced now, and listings are actually quite healthy. In fact, listings in May 2023 are higher than the average.

We can take a look at the sales to new listings ratio and we also see things getting back closer to average. In fact, it’s just slightly below the average so all in all, I’d say we’re approaching a much more balanced market in recent weeks.

The Resilience Of Toronto Real Estate

Next, let’s discuss the resilience of Toronto’s real estate market.

Despite high interest rates, prices have now bounced back to where they were this time last year. The labor market is strong, GDP is robust, incomes have been rising, and consumer spending is on the rise.

There is a genuine need for people to buy homes in Toronto. The market dictates these prices and honestly fundamentals support them.

Houses Have Been Outperforming Condos

Moving on, we’ve noticed an interesting trend since 2020. Houses continue to outperform condos in terms of returns.

While the barrier to entry for houses may be slightly higher, for a young family looking to buy a home – the gap between starting houses and bigger condos isn’t too far off.

There’s also a lot more going for houses for young families – there’s a backyard, there’s more other young families, plus if you house hack with a basement tenant in your house, you end up with lower monthly costs compared to a condo. So this makes houses a lot more attractive.

From an investor standpoint, it might be the difference between plus $800 of positive cash flows in a freehold versus -$800 in a condo.

And then there’s the fact that the government is currently focusing on the growth of low-rise homes, so you also see increasing demand from investors for houses too

416 Detached / Semi Gap Temporarily Widening

Now let’s talk about the gap between 416 semis and 416 detached homes.

Detached houses get a premium because you’re not attached to a neighbour, and there’s generally more development potential.

But there comes a point where if detached homes are priced too high, buyers will just settle for semis for a bigger discounts – so what this means is that this gap might widen and contract but ends up being pretty consistent over time.

The gap has been widening again recently, so keep an eye out on this trend which can present some interesting opportunities.

Is It The Right Time To Invest In Real Estate? Key Opportunities

Well, it depends on what and where.

We often talk about the value-add strategy, and doing renovations is probably our most reliable way to increase real estate value. Whether it’s cosmetic upgrades or converting a house into a multiplex, we stand by this approach.

However, nowadays, finding motivated sellers is a very real theme these days. First off, we’re in a balanced market so the changes of finding motivated sellers is just better.

Then there’s the fact that not all home owners have experienced the impact of the big increase in interest rates yet. And once mortgages renew over the over leveraged home owners, there’s a good chance that you might end up getting a deal when these sellers need to sell too.

So all of this combined with the upcoming summer months where activity typically slows down, honestly deal hunting will be a pretty big opportunity over the next weeks and throughout summer.

How We Can Help

There’s something special we wanted to share this week: Elevate Accelerators.

This is a new powerhouse community we’re creating where we will uncover all of our Toronto real estate investing secrets on top of what you get from us here.

And if you want to start actively searching for properties and want help, just connect with us directly by clicking the link below!

Want To Get Started With Real Estate Investing In Toronto?

We’d be happy to learn more about your situation and help you find the best investment opportunities for you.