Toronto – GTA
In January 2024, the Toronto real estate market experienced a positive start, with a notable increase in home sales compared to the same period in 2023. This rise was attributed to lower borrowing costs associated with fixed-rate mortgage products.
New listings also increased year-over-year but at a slower rate than sales, leading to tighter market conditions compared to the previous year. With the Bank of Canada’s expectation of decreasing inflation throughout the year, we anticipate a lowering of interest rates, which should continue to boost homebuyers’ confidence.
In January 2024, 4,223 sales were reported, marking a more than one-third increase from January 2023. New listings also increased, albeit at a lower annual rate of approximately six percent. The month-over-month seasonally adjusted data indicated an increase in sales and new listings, with sales outpacing listings and tightening market conditions relative to December 2023.
The MLS® Home Price Index Composite in January 2024 saw a slight decrease of less than one percent year-over-year with annual average selling of $1,026,703; however, many sectors are showing robust increases within the first half of February’s sales.
SUMMARY
2024’s outlook remains optimistic, with the expectation of lower interest rates by the year’s second half continuing to fuel consumer confidence. Supply remains the culprit, and with growing demand, we anticipate home sales will steadily increase throughout the year. TRREB Chief Market Analyst Jason Mercer suggests this may result in the upward pressure of selling prices over the next two years.
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Sellers should expect higher returns in the coming months
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Buyers will want to take advantage of lower values before interest rates decline
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Investors will likely see modest increases in capitalization rates
MARKET SNAPSHOT
AVG Condo-Apt Sold Price (C01) – Month of January 2024 – $804,488
AVG Condo-Apt Sold Price (C01) – February 1st – 12th 2024 – $822,337
Within the first half of February, downtown Toronto’s largest area of condominium sales (C01-Waterfront Communities) is already showing signs of increased sold values (2% +). Data taken from MLS® Sold Statistics.
KEEP WATCH
Concerns are mounting around the implementation of more stringent lending policies by bank regulators, as well as continued government intervention, such as Toronto’s recent increase in municipal land transfer tax on property sales north of $3MM. Eyes remain on Toronto’s luxury sales performance in 2024 and the impact of this new tax.
* sourced from TRREB & OSFI
Market Update | January 2024
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