The GTA housing market is beginning to gain momentum, exhibiting robust sales figures across all asset classes in January as compared to last year. The average home sale price for the month settled at$1,026,703, closely mirroring the figures from the same period in 2023. However, the market’s activity suggests that 2024 is gearing up to be a considerably busier year than its predecessor. Total active listings hit 10,093, an 8.5% yearly increase. Although the increase in inventory was modest, it was swiftly overshadowed by strong sales numbers, signalling a resurgence of buyer confidence.
Sales surged across the GTA, reaching 4,223, marking an impressive 36% yearly growth. Experts anticipate further market acceleration in the latter part of the year. This period, prior to any decision by the Bank of Canada to lower interest rates, represents a timely opportunity for potential homebuyers to act before market competition picks up. As highlighted in a recent Globe and Mail article, attempting to time the mortgage rate cuts may not be the best path forward. “The truth is no one knows the future of interest rates – even Mr. Macklem is uncertain about the possibility and timing of rate cuts.
For first-time home buyers navigating the uncertainty, it’s crucial to acknowledge that a crystal ball for mortgage rates doesn’t exist. And getting caught up in the hype and uncertainty surrounding the future of rates is dangerous. When you buy your first home, aim for a reasonable degree of certainty regarding the people in your life and your housing needs; otherwise, you will end up having to sell sooner than you had planned and perhaps in unfavourable market conditions, costing yourself tens or even hundreds of thousands of dollars.” While not all asset classes experienced yearly gains, both the detached and semi-detached markets in the GTA saw price appreciation.
In the detached market, average sales prices saw an increase of $8,980, resulting in an average sales price of $1,350,828. Although the price increase was nominal compared to the
previous year, there are strong indications that buyers are becoming more active. Sales increased by 26% annually, totalling 1,745 sales during the month. However, inventory for detached properties experienced an 8.7% decline compared to January 2023, with active listings totalling just 3,589.
The semi-detached market, on the other hand, saw an average sales price of $1,038,303 in January, indicating an $18,635 yearly increase. This price increase was supported by a 42.9% yearly increase in total sales. Similar to the detached market, the semi-detached inventory started the year with a 21% decrease compared to January 2023. The ongoing inventory shortage that characterized the GTA throughout 2023 continued into the first month of 2024.
Nevertheless, the strong sales environment is expected to drive price gains as competition among buyers intensifies once again. The GTA condo market experienced a 40.5% increase in total sales, while the yearly sales price saw a modest decline of less than 1%. The strong increase in sales activity suggests that price increases are likely in the near future. Similarly, the townhouse segment of the market saw a 59.5% yearly sales increase, totalling 442 transactions. With only 539 active listings to end the month, the limited availability of properties is likely to drive prices higher.
“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. The renewed market strength projected for the latter half of the year seems to be gaining traction earlier than expected. In light of this, both buyers and sellers should be prepared to make informed decisions as the market continues to unfold.
Source: Royal LePage Canada