As we head into 2024, things are looking bright for potential new home and condo purchasers in Toronto. While the Toronto real estate market has been facing some challenges, there is hope for a rebound in 2024.
According to reports from RE/MAX, there was a decrease in average sale prices and the number of sales in the Greater Toronto Area (GTA) between 2022 and 2023. The average sale price decreased by 5.9%, from $1,203,916 in 2022 to $1,132,681 in 2023, and the number of sales decreased by 13.5%, from 67,452 in 2022 to 58,367 in 2023.
In the GTA in 2023, the market was considered a seller’s market. However, there could be a shift toward a balanced or buyer’s market by the end 2024, depending on the neighbourhood in question. Average residential sale prices are predicted to drop by 3%, whereas the number of sales is expected to grow by 10.4%.
The top three areas to keep an eye on in the GTA are the Durham Region, Markham/Richmond Hill, and downtown Toronto. Durham Region is particularly attractive due to its affordability and value. Markham/Richmond Hill is gaining popularity due to improved affordability, and downtown Toronto remains desirable for its access to public transit and walkability, as well as its proximity to endless amenities and cultural attractions.
In terms of new construction trends, there is a focus on smaller condo units that offer desirable amenities like terraces, swimming pools, and fitness facilities.
According to the Toronto Regional Real Estate Board (TRREB), the condo market has become more balanced, with sales increasing but listings growing at a faster rate. This has led to a slight decrease in the average price, providing some relief amidst higher borrowing costs. The market conditions have provided more choice and negotiation power for first-time buyers, resulting in lower selling prices on average. While the market is expected to tighten in the second half of 2024, relief in borrowing costs (including interest rates) is anticipated in 2024 and 2025 due to population growth and market trends. This, coupled with a relatively resilient economy, should make home ownership affordable for more households this year and moving forward.
According to the Royal LePage Market Survey Forecast, the aggregate price of a home in Canada is projected to reach $843,684 in Q4 2024, with a 5.5% annual increase, while the median price of a condo will jump 5% to $616,140. The majority of price appreciation is expected in the second half of 2024, with modest quarterly increases in Q3 and Q4. The prediction is based on the assumption that the Bank of Canada has finished raising interest rates and will hold the key lending rate at its current 5% through the first half of the year. Modest interest rate cuts are expected to begin in the late summer or fall, potentially pushing home prices up.
Overall, this is good news for the Toronto real estate market. A rebound in home sales is anticipated, driven by lower borrowing costs and increased affordability. According to Phil Soper, the President and CEO of Royal LePage, with the right conditions, the market could return to mid-single-digit home price appreciation, which is a healthy long-term affordability level.
Despite the challenges posed by the current market conditions, according to a Leger survey commissioned by Re/Max, 73% of Canadians consider real estate a sound long-term investment. What do you think? Learn more about new condos and townhomes for sale in downtown Toronto by checking out BAZIS’ new communities.