Toronto Real Estate 2024: Booming Start & Future Prospects
The Toronto Real Estate market had a positive start to 2024. The first month of the year saw a total of 4,223 home sales in the GTA, according to the latest data from the Toronto Regional Real Estate Board (TRREB), which is not only up significantly from the 3,444 sales that took place in December (+22.6) but is up even more compared to the 3,083 sales seen in January 2023 (+37%).
Meanwhile, the average home price dropped one per cent from the same time last year to $1,026,703, which was also a 5.4 per cent decrease from the final month of 2023.
Broken down by housing type, all but condo units actually saw their average prices increase in January, albeit by small amounts. Semi-detached homes saw a 1.8% increase, followed by detached homes with a 0.8% jump and townhouses with a 0.5% increase. The condo apartment average sale price fell by 0.6%.
This boom comes as some homebuyers started to benefit from lower borrowing costs associated with fixed-rate mortgage products. Interest rates on five-year insured fixed interest rates began slipping below 5% at a number of lenders in Ontario towards the end of December thanks to the bond yield market having cooled in the preceding month.
With the promise of rates coming down in the near future this has definitely helped buyers feel more comfortable taking action. Buyers are savvy now. They know that when things start trending down with rates, prices are going to come back up. They’re seeing this opportunity and they’re seizing it.
The Bank of Canada expects the rate of inflation to decrease as we move through the year. This would support lower interest rates which would bolster home buyers’ confidence to move back into the market. First-time buyers currently facing high average rents would benefit from lower mortgage rates, making the move to homeownership more affordable.
We’ll see more sellers enter the market aiding in new listings, but we still don’t have enough housing to meet demand. It will result in very tight market conditions as the Bank of Canada cuts rates.