Home sales were up in January 2024 in comparison to January 2023. This annual increase came as some homebuyers started to benefit from lower borrowing costs associated with fixed-rate mortgage products. New listings were also up year-over-year but by a lesser annual rate compared to sales. The resulting tighter market conditions when compared to the same period a year earlier, potentially points toward renewed price growth as we move into the spring market.
“We had a positive start to 2024. The Bank of Canada expects the rate of inflation to recede 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,” said TRREB President Jennifer Pearce.
There were 4,223 sales reported through TRREB’s MLS® System in January 2024 – an increase of more than one-third compared to January 2023. The number of new listings was also up year-over-year but by a lesser annual rate of approximately six percent. Stronger sales growth relative to listings suggests buyers experienced tighter market conditions compared to a year ago.
On a month-over-month seasonally adjusted basis, both sales and new listings were up. Sales increased more than listings which means market conditions tightened relative to December 2023.
“Once the Bank of Canada actually starts cutting its policy rate, likely in the second half of 2024, expect home sales to pick up even further. There will be more competition between buyers in 2024 as demand picks up and the supply of listings remains constrained. The end result will be upward pressure on selling prices over the next two years,” said TRREB Chief Market Analyst Jason Mercer.
Condo Market Update
Fourth quarter 2023 condominium apartment sales in the Greater Toronto Area (GTA) remained low historically, as the demand for ownership
housing continued to be hampered by affordability concerns brought about by high borrowing costs. Buyers who were active in the market benefitted from a substantial amount of choice. This meant that average selling prices were slightly lower than the fourth quarter of 2022.
“The condominium apartment market, like other segments of the homeownership market, experienced a pull-back in activity since the Bank of Canada started hiking interest rates in early 2022. However, looking forward, borrowing costs are expected to trend lower this year and next. This will improve the affordability picture for many first-time buyers, so the condo market is poised for improvement in 2024,” said TRREB President Jennifer Pearce.
Total condominium apartment sales amounted to 3,446 in Q4 2023 – down by 3.4 percent on a year-over-year basis. New condominium apartment listings were up by more than 29 percent over the same period. This divergence between condominium apartment sales and listings also meant that market conditions became more balanced.
The average condominium apartment selling price in the GTA was $702,142 in Q4 2023 – down by 1.1 percent compared to $710,124 in Q4 2022. In the City of Toronto, which accounted for more than two-thirds of total condominium apartment sales, the average selling price was $720,456. This result was down by 2.4 percent compared to Q3 2022. “Condominium apartment prices remained relatively flat over the past year. Buyers had plenty of negotiating power given the level of supply in the marketplace. As we move through 2024, demand for condominium apartments should pick up. Expected decreases in borrowing costs coupled with high average rents could prompt more households to purchase a home over the next year. Condominium apartments are a key entry point into the ownership market,” said TRREB Chief Market Analyst Jason Mercer.