Is 2023 the Year Housing Prices Finally Hit Bottom?

The answer is YES, according to the TD bank (1).  Rishi Sondhi, a TD economist believes that there will be another hike in interest rates in January and then a pause which will coincide with home prices and sales hitting the floor.

Prices could fall as much as 20% from their highs of 2022.  As of December, the Canadian Real Estate Association has reported that the average price of a home in Canada has declined by 12%.

Although prices are expected to hit bottom, they are not likely to rise in the short-term as high interest rates have increased the costs of owning a home, thus causing a decline in housing affordability, which has hit levels not seen since the late 1980s and early 1990s (1).

Sales in the GTA fell 48% (2) in December compared with the numbers in December 2021.  Sellers are hoping for a return to the prices of Feb 2022, but that is very unlikely to happen according to CIBC economist, Benjamin Tal. 

“2023 is likely to mark the weakest sales year since 2001”, says TD.  The housing market is not expected to turn around until 2024

1. Financial Post, Jan 11, 2023, by Victoria Wells
2. The Globe and Mail, Jan 11, 2023, by Carolyn Ireland