TORONTO (Reuters) - Home sales and prices in the Greater Toronto Area (GTA) are set to fall in 2023 as higher borrowing costs weigh on the market but improvement is expected in the second half of the year, the Toronto Regional Real Estate Board (TRREB) forecast on Friday.
Home sales in the GTA are expected to decline to 70,000 this year from 75,107 in 2022, which would be the lowest level since 2001, while the average selling price is forecast to fall 4% to C$1.14 million ($854,125).
Still, home prices are expected to rise from an average of C$1.04 million in January, the most recent month of data. Prices in the once red-hot market have fallen about 22% from their peak in February last year.
"It will be a year of two halves in 2023. The first half will feel similar to the fall of 2022 due to the lingering effects of higher borrowing costs and related economic uncertainty," Jason Mercer, TRREB chief market analyst, said in a statement.
"The second half of 2023 should be characterized by an increase in demand for ownership housing, supported by lower fixed mortgage rates, a relatively resilient labour market, and record immigration."
The Bank of Canada has signaled a pause in its campaign to raise interest rates after hiking at a record pace since March to a 15-year high of 4.50%.
($1 = 1.3347 Canadian dollars)