Windsor Real Estate vs. Toronto

For years, the Windsor real estate market had been sluggish amid anemic economic conditions. The state of the city’s housing sector dramatically changed during the coronavirus pandemic, with the municipality enjoying growth it had not witnessed in years. Because of its affordability, households relocated to Windsor and took advantage of the rock-bottom prices.

By the end of the public health crisis, costs had become too high and priced many families out of the market. Fast forward to October 2023, and the Windsor real estate market has come to a screeching halt.

What happened?

The same thing that has impacted the Toronto real estate market: higher interest rates.

While the nation’s housing sector has not cratered as many banks and economists had anticipated when the Bank of Canada (BoC) first started pulling the trigger on rate hikes, there has been a noticeable cooling-off period in Toronto, Windsor, and in many pockets of the nation. This has likely been driven by the fact that the conventional five-year fixed-rate mortgage is north of six per cent.

So, how do the two Ontario housing markets compare these days? Let’s take a deeper dive into the data.

State of the Windsor Real Estate Market

According to the Windsor-Essex County Association of REALTORS®, residential property sales advanced by 7.4 percent in October, totalling 434 units. However, this might have been an anomaly for two reasons. First, home sales were more than 28 per cent below the five-year average. Second, on a year-to-date basis, home sales have slumped nearly 17 per cent compared to the same span a year ago.

The MLS® Home Price Index (HPI), which is considered a more accurate measurement than average or median price measurements, rose close to three per cent to $572,600. At the same time, the average sales price of homes sold in October tumbled about two percent to $526,535. Additionally, the year-to-date average price has plunged 10.7 per cent to $550,571.

Here is a breakdown of the benchmark price for the three main property categories based on data from the local real estate association:

• Single-Family: +4.6 per cent to $619,000
• Townhome: +3.3 per cent to $435,700
• Apartment: -5.2 per cent to $398,000

Supply has improved in the Windsor housing market, with new and active residential listings climbing 21.8 per cent and 7.9 per cent, respectively, in October. Plus, the months of inventory, which assesses the number of months it would take to exhaust current supplies at the present rate of sales activity, clocked in at 3.3, above the long-term average of 2.5 months for this time of the year.

Now, what is happening in Toronto these days?

State of the Toronto Real Estate Market

In Toronto, the housing market recorded 4,646 home sales in October, down 5.8 per cent compared to October 2022, according to the Toronto Regional Real Estate Board (TRREB). A drop in transactions was witnessed throughout all major home types, including an 11.5 per cent decline in the sale of townhouses.

However, that was essentially it on the bad news front in North America’s fourth-largest city.

The average selling price advanced at an annualized pace of 3.5 per cent to $1,125,928. Price gains were seen throughout most of the major home types to kick off the fourth quarter:

• Detached: +6.1 per cent to $1,450,112
• Semi-Detached: +2.1 per cent to $1,102,721
• Townhome: +1.1 per cent to $930,185
• Condo: -1.2 per cent to $708,780

Like the Windsor housing market, the Toronto real estate industry has seen an explosion of new stocks. Association data show that new listings soared 38 per cent year-over-year in October, totalling more than 14,000 units. Moreover, active residential listings skyrocketed 50 per cent to nearly 20,000 units.

“Competition between buyers remained strong enough to keep the average selling price above last year’s level in October and above the cyclical lows experienced in the first quarter of this year. The Bank of Canada also noted this resilience in its October statement. However, home prices remain well below their record peak reached at the beginning of 2022, so lower home prices have mitigated the impact of higher borrowing costs to a certain degree,” said TRREB Chief Market Analyst Jason Mercer in a statement.

Windsor Real Estate vs. Toronto

The Toronto and Windsor real estate markets are two different beasts. The former is the economic engine of Canada, while the latter is an international trans-border city. But both Canadian housing markets are experiencing similar trends: slowing sales activity, modest price growth, and ballooning supply. And, of course, both Ontario cities are enduring the blows of a rising-rate climate. The one positive takeaway is that the Bank of Canada is likely finished raising interest rates, which could alleviate some of the mortgage cost pressures affecting households across the country.

Could next year somewhat revitalise the 2020-2021 housing boom? It will all depend on Tiff Macklem.