Feb. 6, 2024
In a report released on February 6, 2024, the Toronto Regional Real Estate Board (TRREB) reveals a notable shift in the real estate landscape in January 2024 compared to the previous year. Tighter market conditions and positive indicators suggest potential renewed price growth as the market transitions into the spring season.
January 2024: Positive Trends and Tighter Market Conditions 🔄🏠
Home sales in January 2024 witnessed a significant uptick compared to the same period in 2023. This annual increase was attributed to homebuyers benefiting from lower borrowing costs associated with fixed-rate mortgage products. New listings also increased year-over-year, although at a lesser annual rate compared to sales. The resulting tighter market conditions when compared to the previous year could signal a shift towards renewed price growth in the approaching spring market.
TRREB President Jennifer Pearce notes, “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.”
Sales and Listings Dynamics 📊🏡
January 2024 saw 4,223 sales reported through TRREB’s MLS® System, marking an increase of more than one-third compared to January 2023. New listings also saw a year-over-year increase, albeit at a lesser annual rate of approximately six percent. The stronger sales growth relative to listings indicates that buyers experienced tighter market conditions compared to the previous year.
On a month-over-month seasonally adjusted basis, both sales and new listings increased, with sales outpacing listings. This dynamic suggests a tightening of market conditions relative to December 2023.
Future Outlook and Predictions 🔮💼
TRREB Chief Market Analyst Jason Mercer anticipates that as the Bank of Canada potentially starts cutting its policy rate in the second half of 2024, home sales are likely to pick up even further. Increased demand coupled with constrained supply is expected to result in more competition between buyers, putting upward pressure on selling prices over the next two years.
The MLS® Home Price Index Composite in January 2024 showed a minor year-over-year decrease of less than one percent, while the average selling price was down by one percent to $1,026,703. On a month-over-month seasonally adjusted basis, both the MLS® HPI Composite and the average selling price trended lower.
Policy Considerations and TRREB's Call to Action 🏛️📢
While acknowledging the potential improvement with lower borrowing costs, TRREB CEO John DiMichele highlights the need for addressing policy issues at various levels. This includes a call for a review of the mortgage stress test, focusing on building new homes, and addressing Toronto’s structural deficit.
The report also teases the upcoming release of TRREB's 2024 Market Outlook and Year in Review on February 8, providing valuable industry insights and forecasts for the GTA real estate market, including research on the social implications of unaffordability and preparations for a rising population. 🌆🔍📈
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