February 2024: Market Update

February isn’t typically a month to look out for in Toronto real estate as the cold and dark weather typically keeps buyers at bay while they wait for Spring. However, perhaps due to the warmest February we’ve had on record or because the market assumes the Bank of Canada has stopped raising interest rates, we’ve seen a resurgence in sales activity.

We first saw a trend beginning in January with strong sales figures continuing through February 2024. The number of homes sold in the GTA last month was up 17.9% from the year before supported by a significant increase in new listings (+33.5%). Despite these substantial figures, the average home price remained consistent since last year at $1,108,720 (+1.1%), still surpassing the 5-year average of $1,008,572.

The assumption behind this resurgence is that there’s pent up demand from buyers who have been on the sidelines for the last couple years waiting for interest rates to come down, and now that there’s signs of stability buyers are getting into the market before prices inevitably rise when rates do come down. It also seems that Canadians have started to get used to the idea of higher mortgages with the ‘near-zero’ lending rates we saw after COVID far in the rear-view mirror.

Although we’ve seen a large increase in demand from consumers in the first two months of 2024, 51% of Canadian homebuyers are waiting for interest rate cuts to resume their purchase plans, according to a recent survey by Royal LePage, which means there is still room for strong sales to continue as more buyers come out of the woodwork.

The Toronto Regional Real Estate Board (TRREB) comments, “As we move through 2024, an increasing number of buyers will re-enter the market with adjusted housing preferences to account for higher borrowing costs.” Looking further ahead, considering population growth has been at a record pace and with anticipated lower mortgage costs, they expect the demand for housing - both ownership and rental - will increase over the next two years.

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Market Commentary by Joseph Robert, Broker of Record &
JR Robert, Sales Representative