What happens when steady demand meets tight supply?
The Toronto Regional Real Estate Board (TRREB) has unveiled its 2024 Market Outlook and Year in Review report, along with an interactive digital digest, offering a forecast for the Greater Toronto Area (GTA) real estate market.
This year’s report includes fresh insights from Ipsos consumer polling on home buying and selling intentions, alongside TRREB’s projections for home sales, new listings, and average prices, while also examining the key factors influencing these trends - such as interest rates, population growth, and the labour market.
According to TRREB’s analysis, the GTA housing market is poised for an upswing in 2024, fuelled by record population increases, a robust economy, low unemployment rates, and a decline in mortgage rates expected in the latter half of the year.
“Demand for ownership housing in the GTA will start improving in 2024,” TRREB’s chief market analyst Jason Mercer said. “This will be the start of a multi-year recovery as some households will still face affordability challenges, even as borrowing costs begin trending lower. As the demand for housing picks up, it will be equally important to see a rebound in the supply of homes for sale and an uptick in new home construction.”
At the same time, Mercer acknowledged that affordability challenges will persist for some households, even as borrowing costs begin to decrease. However, this is seen as the beginning of a multi-year recovery process. The report projects a total of 77,000 sales in 2024, with the average selling price expected to reach $1,170,000 for all home types combined, marking it as the second highest on record but still below the peak of early 2022.
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Consumer sentiment, as gauged by Ipsos, indicates that while overall buying intentions have remained steady with 28% of respondents considering purchasing a home in 2024, there’s a slight decline in the share of respondents who are very likely to purchase. This suggests some uncertainty among potential home buyers at the outset of 2024.
Beyond sales and listings, the report underscores the broader implications of the housing crisis on the mental and physical health of residents and emphasizes the critical need for an increase in housing supply to match the record population growth driven by immigration.
TRREB president Jennifer Pearce and chief executive officer John DiMichele advocate for removing barriers to new home construction and emphasize the importance of providing more diverse and affordable housing options, including prioritizing what DiMichele calls “missing middle” housing.
“It’s clear that our regions will only see sustained relief on the affordability front once we remove the roadblocks standing in the way of progress and get shovels in the ground faster. In the wake of a growing population, policymakers cannot lose sight of planning ahead,” Pearce said.
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