The Greenhouse
by Pine

The Ontario Housing Market Report, according to CMHC

"Declining house prices and weaker housing supply are expected to continue to affect Canada’s housing market in 2023."

Unveiling Ontario's housing dynamics: A glance at trends and forecasts

Ontario Market Snapshot

Based on the latest findings from the Canada Mortgage and Housing Corporation (CMHC), Ontario's housing market has seen significant shifts and trends over the past few years. According to the Housing Market Outlook, let's dive into some key data points to understand the current landscape:

  • Benchmark Prices: The Ontario housing market has experienced notable changes in the average sale prices. As of August 2023, the benchmark price for a single-family home in Ontario rose by 1.9% year-over-year, reaching $993,500. Additionally, the benchmark price for townhouses/multiplexes saw a 0.4% increase year-over-year, settling at $726,200. On the other hand, the benchmark condo price experienced a decrease of 1.7% year-over-year, bringing it to $647,000. Overall, Ontario's composite home price witnessed a 1.0% year-over-year increase, averaging $908,000.
  • Affordable Budget: While the housing market has seen fluctuations in prices, potential homeowners need to be aware of the evolving landscape. The data from the Ontario Real Estate Association (OREA) indicates that the average price of resale residential homes in Ontario for August 2023 was $908,000, marking a 1.0% increase compared to the previous year. This suggests that potential homeowners should adjust their budgets and expectations accordingly, keeping in mind the current market trends and the overall economic climate.
  • Sales-to-New Listings Ratio: This ratio provides insights into the balance between supply and demand in the housing market. A higher ratio indicates a seller's market, while a lower ratio suggests a buyer's market. In Ottawa, for instance, the sales-to-new listings ratio has fluctuated over the years, with values like 0.65 in 2000 and 0.67 in 2018.
  • Regional Highlights: Specific regions within Ontario, such as Hamilton, have shown unique trends. For instance, in Hamilton, the MLS® average price in 2022 was CAD 962,801, with MLS® sales reaching 15,916.
  • Rental Market: The rental market also plays a crucial role in housing. In St. Catharines-Niagara, for example, the average apartment vacancy rate in 2022 was 2.8%, with 575 rental apartment completions.

Key Market Drivers

Understanding the forces that drive the housing market is crucial for both potential buyers and investors. Let's delve into the primary factors influencing Ontario's housing landscape:

  • Economic Uncertainty: The housing market is closely tied to the broader economy. Heightened economic uncertainty brings greater downside risks to housing forecasts. Persistent inflation could lead to prolonged higher interest rates, affecting housing demand recovery. Local developers have also expressed concerns about shortages in construction materials and labor, which could impact housing starts.
  • Affordability Concerns: As housing prices continue to evolve, the budget that potential homeowners consider affordable has experienced variations. Data from the Ontario Real Estate Association (OREA) highlighted that the average price of resale residential homes in Ontario for August 2023 was $908,000, marking a 1.0% increase from the previous year. This budget is formulated considering mortgage payments that account for 30% of a family's income, with factors like a 5-year conventional mortgage rate, a 25-year amortization period, and a 20% down payment in mind.
  • Migration Patterns: Migration significantly impacts housing demand. The primary demographics driving demand in Ontario's residential property market include those looking to upscale their homes, foreign investors, professionals who have recently immigrated to Canada within the past 5 years, and out-of-province migrants advancing their careers in Toronto while maintaining a commutable distance in Ontario.
  • Rental Market Dynamics: The rental market is a key component of the housing landscape. In regions like St. Catharines-Niagara, the average apartment vacancy rate in 2022 was 2.8%, with 575 rental apartment completions. Such data points highlight the demand and supply dynamics in the rental market.
  • Economic Overview: Economic indicators such as Real GDP, employment, and mortgage rates play a pivotal role in shaping the housing market. For instance, the fixed 5-year mortgage rate was 3.7% in 2020, 3.3% in 2021, and is expected to be around 5.7% in 2023.

Regional Deep Dive

Ontario's vast landscape is home to diverse housing markets, each with its unique characteristics. Let's take a closer look at some of the key regions:


Average Sale Price Trend:

  • Toronto's housing market witnessed a significant surge in average sale prices, especially in the first quarter of 2022, reaching a peak of $983,147. This was a notable increase from the $752,203 recorded in the first quarter of 2021.

Affordability Concerns:

  • The affordable budget for potential homeowners in Toronto declined over the year. Starting at $674,107 in Q1 2021, it dropped to $555,185 by the end of 2022. This indicates that while housing prices surged, the budget families could allocate toward housing without financial strain decreased.

Market Insights:

  • The Toronto market experienced volatility in 2022, with prices peaking in Q1 and then experiencing a decline in subsequent quarters. This could be attributed to various factors, including economic conditions, interest rate fluctuations, and housing policies.

Hamilton CMA:

New Home Market:

  • Starts (Single-Detached): Ranged from 529 in 2020 to an expected 850 in 2025.
  • Starts (Multiples): Ranged from 2,902 in 2020 to an expected 3,250 in 2025.
  • Total Starts: Ranged from 3,431 in 2020 to an expected 4,100 in 2025.

Resale Market:

  • MLS® Sales: Ranged from 14,458 in 2020 to an expected 15,000 in 2025.
  • MLS® Average Price: Ranged from CAD 692,419 in 2020 to an expected CAD 1,040,000 in 2025.

Rental Market:

  • Vacancy Rate: Decreased from 3.5% in 2020 to 1.9% in 2022.
  • Average Rent for Two Bedrooms: Increased from CAD 1,291 in 2020 to CAD 1,438 in 2022.


Average Sale Price Trend:

  • The Kitchener-Cambridge-Waterloo region, often referred to as the KW region, also experienced an upward trend in housing prices. While specific quarterly data isn't provided, the overall trend aligns with the broader Ontario market's trajectory.

Affordability Concerns:

  • Similar to Toronto, the KW region has seen challenges in housing affordability. As prices have risen, potential homeowners have found it increasingly challenging to find properties within their budget, especially given the region's growing appeal as a tech hub and its proximity to Toronto.

Market Insights:

  • The KW region's growth as a tech and innovation center has attracted a younger demographic, leading to increased housing demand. The region's strategic location, combined with its economic growth, has contributed to the upward pressure on housing prices.

St. Catharines-Niagara:

  • The region witnessed a three-decade high in rental construction.
  • Average Apartment Vacancy Rate in 2022: 2.8%.
  • Rental Apartment Completions in 2022: 575 units.


  • Despite record highs in rental unit completions, rental vacancy rates are at historic lows.
  • Average annual rental completions from 2018-2022: 201.6 units.
  • Average vacancy rate from 2018-2022: 2.88%.


  • The Sales-to-new listings ratio has seen fluctuations over the years. For instance, in 2000, the ratio was 0.65, and by 2018, it reached 0.67.

Each region in Ontario presents its unique opportunities and challenges. Whether you're a homebuyer, investor, or just curious about the market, understanding these regional nuances can offer valuable insights.

Future Predictions and Market Expectations

Modest Price Growth in 2023, Strengthening in 2024-2025

The housing market is expected to witness a more modest annual price growth in 2023, primarily due to a shift in sales towards multi-unit options. However, this growth is anticipated to strengthen in the subsequent years, 2024 and 2025.

Housing Starts Trend

Overall housing starts are predicted to decline slightly in 2023. This decline is attributed to factors such as higher financing costs. However, a rebound is expected in 2024-2025. Notably, multi-unit starts are projected to remain robust throughout this period.

Rental Market Dynamics

Rental demand is forecasted to remain strong until 2025. A significant driver for this demand is the expected more robust population growth in the region. This growth will likely push the vacancy rate down over the next few years.

Market Risks

There are potential downside risks to these predictions. Persistent inflation could lead to prolonged high-interest rates, affecting housing demand recovery. Local developers have also highlighted potential challenges, such as shortages in construction materials and labour, which could impact housing starts.

Broader Perspective

Bob Dugan, Chief Economist, provides a broader view: "Declining house prices and weaker housing supply are expected to continue to affect Canada’s housing market in 2023. While prices have declined, homeownership will be less affordable because of higher mortgage rates and still-elevated price levels. Rental affordability will also likely decline as demand outpaces rental supply. We foresee a significant drop in housing starts in 2023 than seen in the 2020-2022 period, but some recovery in 2024 and 2025. Consequently, supply gaps in Canada’s most expensive and supply-constrained housing markets, including Vancouver and Toronto, will worsen. Economic recovery and high immigration will add to housing demand in 2024 and 2025, but challenges related to affordability and supply will persist."

Navigating Ontario's Housing Future with Pine

As we've delved into the intricacies of Ontario's housing market, it's evident that the landscape is evolving. From shifting price trends to changing housing demands, the province is on the cusp of significant transformations. While these changes present challenges, they also offer opportunities for potential homeowners and investors.

This is where Pine steps in. As a direct mortgage company, we're not just observers of these market dynamics; we're active participants, helping our clients navigate the complexities. Our deep understanding of the market, combined with our tailored mortgage solutions, positions us as a trusted partner in your homeownership journey.

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