A FEBRUARY RESET: WHAT’S HAPPENING IN THE MARKET?

The Greater Toronto Area (GTA) housing market experienced an increase in sales and new listings on an annual and monthly basis in February 2024, along with a rise in selling prices. This can be attributed to the region’s population growth and resilient economy, which have continued to support the demand for housing. Despite higher borrowing costs, homebuyers have adapted to the market conditions and have saved up larger down payments looked for less expensive home types, or searched for different locations in the GTA.

The Bank of Canada’s decision to halt rate hikes has given consumers hope for future rate cuts, leading to a resurgence in sales activity compared to last year. This shift in the market will attract more buyers to re-enter the market with adjusted housing preferences to account for higher borrowing costs. Moreover, lower interest rates expected in the second half of the year will further boost demand for ownership housing.

According to the latest report by TRREB, GTA home sales through the MLS® System in February 2024 increased by 17.9% compared to February 2023, while new listings were up by an even greater annual rate, pointing to increased choice for buyers. The MLS® Home Price Index Composite benchmark edged up by 0.4%, and the average selling price of $1,108,720 increased by a modest 1.1%.

As we move through 2024, a growing number of renters will look to trade high monthly rents for a long-term investment in which they can live and build equity, contributing to the rise in first-time buying activity. The increased demand for housing – both ownership and rental – will also grow over the next two years due to the region’s population growth and lower borrowing costs. It’s reassuring to see that the provincial government is rewarding municipalities that are working to eliminate the red tape and meet homeownership needs.

Research conducted for TRREB by CANCEA in the 2024 Market Outlook and Year in Review report also highlights the negative impact of unaffordable housing on people’s mental health and life satisfaction. Therefore, it is necessary to address the issue of unaffordable housing and work towards making housing more affordable for everyone.