The GTA housing market experienced some turbulence throughout 2023; however, its enduring resilience remains the standout feature. Commencing the year with an average sales price of $1,038,668, properties saw a remarkable 15% surge by May, reaching an average sale price of $1,196,101. The latter half of the year witnessed a surge in inventory, peaking at 19,540 properties in October. The increase in inventory, paired with two additional interest rate increases in early summer dampened the increase in property values, however homes in the GTA were, on average, worth more in December 2023 than they were at the beginning of 2023, with an average sales price of $1,084,692. However, sales faced challenges, with 66,252 total properties sold in 2023, representing a 28% decrease compared to the previous five-year average.  Sales will not remain as subdued in 2024.  As we move through the year, we anticipate higher sales volume and more competition returning to the market.

“Buyers who were active in the market benefitted from more choice throughout 2023. This allowed many of these buyers to negotiate lower selling prices, alleviating some of the impact of higher borrowing costs. Assuming borrowing costs trend lower this year, look for tighter market conditions to prompt renewed price growth in the months ahead,” said TRREB Chief Market Analyst Jason Mercer.

Mortgage rates were a focal point in 2023, and anticipation for 2024 revolves around potential interest rate decreases. Once rates do begin to wane values are likely to escalate as Royal LePage CEO Phil Soper recently highlighted. “We see 2024 as an important tipping point for the national economy as the majority of Canadians acknowledge that the ultra-low interest rate era is dead and gone. We believe that the ‘great adjustment’ to tolerable, mid-single-digit borrowing costs will have a firm grip on our collective consciousness after only modest rate cuts by the Bank of Canada.”  What does this mean for property values throughout 2024? Phil Soper spoke to that as well. “Based on this forecast, by the end of next year, home prices will have essentially climbed back to their pandemic peak, reached in the first quarter of 2022,” he said.

As 2024 exhibits renewed optimism, let’s recap the performance of individual asset classes in 2023. The detached segment led the way, starting with an average sales price of $1,314,848 and achieving a robust 16% increase in May, concluding the year with an average sales price of $1,418,323—a  5.69% gain.

The townhouse market secured the second spot, commencing the year at an average sale price of $976,500. A 14.45% surge in May led values to a yearly high of $1,117,696. As the year progressed values compressed and resulted in a year-end sale price of $996,162, reflecting a 2% gain.

The semi-detached asset class claimed the third position, starting the year at an average sales price of $1,019,668. With a high-water price of $1,214,872 in June, values finished the year at $1,027,432, representing just under a 1% gain over the year.

Conversely, the condo asset class is the only segment to slightly drop in value during the year. January began with values of $687,696. Despite an 8.8% increase to $748,483 during May, the year concluded with an average of $682,525, marking a loss of 0.75% in 2023 and marking an excellent opportunity, particularly for first-time buyers, to enter the market while price points are stable and inventory is available.

The resilience of the market was evident throughout 2023 and the forecast for 2024 is a clear indicator that demand for housing is not waning. A recent article in the Toronto Star succinctly summarizes the current state of the market.  “Real estate is cyclical and we’ve hit the lowest point in the fourth quarter of 2023 in terms of sales activity and prices. There’s going to be a tipping point next year during the spring from all this pent up demand and strong indication from the Bank of Canada that it will begin to cut rates.”

In conclusion, the GTA housing market weathered the uncertainty of 2023 with unwavering resilience. Moving into 2024, there are positive indicators for recovery and growth, and greater confidence in the potential for a robust comeback. The cyclical nature of real estate, coupled with anticipated rate cuts and pent-up demand, positions the market for a spring resurgence.