Toronto's real estate market roars back to life, ending short-lived buyers' market

Toronto's real estate market roars back to life, ending short-lived buyers' market.

New data released by Toronto's real estate board shows home sales surging in January by 37% compared to the same time last year and new listings up by 6.1%.

Toronto's real estate market has roared back to life, ending the short-lived buyers' market that followed a sluggish fall season that hit a multidecade low for sales.

Home sales were up in January by 37 per cent compared to the same time last year and new listings increased by 6.1 per cent, a Tuesday report from the Toronto Regional Real Estate Board (TRREB) said.
The sales-to-new-listings ratio is now at 50 per cent, meaning the GTA is in a balanced market. (Anything below 40 per cent is considered a buyers’ market, below 40 a buyers' market and above 60 per cent a sellers' market.)

Toronto real estate starting to move away from a buyers' market
Toronto’s real estate market has been in a buyers’ market since September 2023, with the exception of December, which historically has few new listings. 

"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 homebuyers' confidence to move back into the market," said TRREB president Jennifer Pearce in the report.

Sales increased more than new listings since December, the report said, indicating that mark conditions are tight.
"There's an improvement on the demand," TRREB chief market analyst Jason Mercer told the Star. "We did see growth in new listings but not as much as sales. The improvement in sales though could prompt more new listings getting sellers into the market."

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.

"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."

The average selling price in January 2024 was $1.02 million, slightly below January 2023’s $1.03 million, the report said.

Prices for detached, semi detached and townhomes increased year-over-year by 0.8 per cent, 1.08 per cent and 0.5 per cent, respectively, while condo prices dropped 0.6 per cent.

However sales increased for all property types with condos seeing a 41 per cent jump year-over-year, after it was knocked down in the second half of 2023 due to over-leveraged investors off-loading their units.

"The condo market is the entry point into home ownership for first-time homebuyers," Mercer said. "We've seen strong increases in average rents over the last year, which could prompt more people to buy as the gap between rents and mortgage costs narrow. And that will free more rental units, which isn't a bad thing."

While January sales are still below the 10-year average, he said, activity will continue to increase month over month until the spring market.

"We'll see more sellers enter the market aiding in new listings but we still don't have enough housing to meet demand," Mercer said. "It will result in very tight market conditions as the Bank of Canada cuts rates."Please share this