Board notes the movement of interest rates could be pivotal
Home sales in Greater Toronto in December 2023 jumped 11.5% year over year. This comes as the Toronto Regional Real Estate Board says that 2024 will bring a rebound in activity following year-long low housing affordability.
However, inventory remains higher than usual, resulting in a decrease in prices, according to a Reuters report. Annual home sales were down 12.1% to 65,982 overall, compared to 2022. According to a Canadian Press report, Toronto Regional Real Estate Board (TRREB) data suggests this was likely caused by high mortgage rates throughout 2023.
“High borrowing costs coupled with unrealistic federal mortgage qualification standards resulted in an unaffordable homeownership market for many households in 2023,” said Jennifer Pearce, president of the TRREB, in a press release.
“With that said, relief seems to be on the horizon. Borrowing costs are expected to trend lower in 2024. Lower mortgage rates coupled with a relatively resilient economy should see a rebound in home sales this year.”
The Bank of Canada has indicated rate cuts may be on the horizon in 2024 if inflation comes down as projected. It has kept its benchmark rate at 5% since July last year.
Across Greater Toronto, December home sales increased in all categories year over year, except for condo apartments, which decreased by 1.4%. Semi-detached homes jumped 36.7% in sales, while sales of townhouses rose 19.8%. The average home price at the end of the year was $1,084,692, up 3.2% year over year.
New listings declined by 6.5% in December to 3,886 compared to the same month in 2022.
Jason Mercer, the board’s chief market analyst, said those who were able to participate in the market last year benefitted from more options, giving them a chance to negotiate lower prices.
“Assuming borrowing costs trend lower this year, look for tighter market conditions to prompt renewed price growth in the months ahead,” he said.
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