Toronto home sales surge almost 40%, but prices slip for eighth month in a row

Toronto’s benchmark home price declined for the eighth consecutive month in January, but a surge in home sales from a year ago left the region’s real estate board warning that prices might not stay down for long.

Overall, 4,223 sales were reported through the Toronto Regional Real Estate Board‘s MLS system for the month, a 37 per cent increase from January 2023. The benchmark home price slipped less than one per cent month-over-month to $1,065,800, continuing a downward trend that began in June 2023, when the benchmark was $1,171,300.

TRREB hailed the figures, released Feb. 6, as a “positive start” to the year, noting that the decline in home prices might not persist for long.

“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,” the board said in a press release.

The number of new listings also experienced a year-over-year increase, though at a more modest rate of approximately six per cent.

TRREB’s chief market analyst, Jason Mercer, anticipates the scarcity of housing supply will persist over the next few years.

“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,” Mercer said in the report. “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.”

TRREB’s CEO, John DiMichele, said that while lowering borrowing costs will be a positive factor, it represents just one piece of the puzzle when it comes to improving housing market conditions.
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“At the federal level, more reflection on the Office of the Superintendent of Financial Institution (OSFI) mortgage stress test is required, especially to its application at different points in the interest rate cycle,” DiMichele said in the report.

DiMichele said that Ontario’s key priority should be the construction of 1.5 million new homes, but expressed concern at Toronto’s efforts to raise property taxes, a move he said would not effectively tackle the city’s structural deficit.

The board, which serves over 69,495 real estate brokers and salespersons across the Greater Toronto Area, reported the largest benchmark price increases were recorded in Caledon at 3.02 per cent, East Gwillimbury at 2.62 per cent and Bradford at 2.58 per cent.

Meanwhile, the largest benchmark price declines were recorded in Innisfil, Scugog and Oakville at 4.66 per cent, 3.97 per cent and 2.78 per cent, respectively.

The lowest benchmark home price was found in Innisfil at $767,400 in January.Please share this