This is how much the average price of a GTA home is expected to drop next year

A sold sign is shown in front of west-end Toronto homes Sunday, May 14, 2017. THE CANADIAN PRESS/Graeme Roy

The average price of a house is forecasted to drop by nearly 12 per cent in the Greater Toronto Area (GTA) next year.

According to Re/Max Canada’s housing market outlook for 2023, the GTA’s currently balanced market is expected to continue next year.

As per the report, house prices rose 11 per cent from $1,086,155 last year to $1,203,916. But for 2023, average residential sale prices are expected to drop 11.8 per cent to about $1,061,854, which is a roughly $142,000 price difference.

As prices start to decrease, Re/Max says there will be three main trends that will carry on into the new year.

“Continued interest rate increases and associated price adjustments, rising unemployment due to an economic slowdown, and new opportunities to engage in the market for buyers and sellers because of improved affordability,” Re/Max Realtron Realty broker, Cameron Forbes, said

This could be good for prospective homebuyers, as Forbes says there will be fewer competitors to deal with, reduced prices and more options to choose from on the market.

“Meanwhile, sellers will have a trade-up advantage, reduced competition of listings, a stronger ability to re-locate to the suburbs, and have all of the advantages that buyers do, too,” Forbes said.

Currently, the most desirable neighbourhoods are based on location, affordability, and access to transit.

The continued rising interest rates, however, will still make it a slower real estate market for all in the GTA. Re/Max notes this will particularly impact first-time homebuyers, as many choose to put their dreams of owning real estate on the back burner due to a lack of affordability.

Toronto’s luxury real estate market is also expected to continue to cool down next year due to economic pressures.

“It’s important to also consider some key context for the GTA. The pandemic between Spring 2020 and early 2022 were outliers in terms of pricing and demand, and factoring out those years in assessing what lies ahead for the region is important as we slowly tilt back to a post-pandemic recovery,” Re/Max Canada President, Christopher Alexander, said in the report.

“This moderating market is an opportunity for homebuyers to take the time to consider their needs, assess opportunities patiently and ultimately make a wise purchasing decision and investment in the long run.”

On top of the GTA, Durham region, London, Kitchener-Waterloo, Barrie and the Georgian Bay area are expected to see average house prices decline between two to 15 per cent next year.

Hamilton, Burlington, Oakville, Brampton, Mississauga, Niagara, and Peterborough are among some of the regions where sale prices will actually increase between two to eight percent in 2023.

“Hamilton-Burlington, Brampton, Mississauga and Niagara are buyer’s markets, while Sudbury, Muskoka, Durham York Region, Haliburton, Ottawa and Peterborough and the Kawarthas favour sellers,” the outlook report reads.