Currently, the GTA housing market teeters between a buyer's and a seller's market. While demand remains robust, particularly for certain property types like semi-detached homes, supply constraints contribute to a competitive environment. Will prices continue to decline? Will demand rebound or remain subdued? In this article, we will examine the latest trends and data from the Greater Toronto Area (GTA) housing market, as well as forecast what we can expect to see in the coming months.
Toronto Housing Market Trends in 2024
In March 2024, the Greater Toronto Area (GTA) housing market continued its lively pace, demonstrating resilience despite economic fluctuations. This vibrant activity showcased both challenges and opportunities for prospective homeowners and investors alike.
The benchmark home price in the GTA for March 2024 reached $1,113,600, marking a 1.8% increase from February 2024. This upward trend deviates from the overall 0.3% increase observed over the past year. Concurrently, the average home price in the GTA stood at $1,121,615, reflecting a 1.2% rise from the previous month and a substantial 9.2% surge compared to January 2024. On an annual basis, the average home price rose by 1.2%.
Toronto Housing Market Competitiveness
Amidst this dynamic landscape, the GTA housing market remains competitive. Home sales for March 2024 continued to climb, with a 17% increase compared to the previous month. However, there was a 4.9% decline year-over-year, resulting in 6,560 homes sold during the month. The sales-to-new-listings ratio (SNLR) rose slightly to 50%, indicating a growing demand relative to available supply. Although the market remains balanced, this slight shift favors sellers, albeit marginally.
Supply and Demand Dynamics
Despite the upward trajectory of sales, the GTA faces challenges in meeting buyer demand. New listings surged to 13,120 in March 2024, marking a significant 17% increase from the previous year. This increase in supply suggests efforts to meet growing demand. However, with demand outpacing supply, the market maintains a delicate balance, with buyers and sellers carefully weighing their options.
Exploring Regional Trends in the Toronto Housing Market
City of Toronto vs. Greater Toronto Area
In March 2024, the City of Toronto experienced notable variations in home prices compared to the Greater Toronto Area (GTA) as a whole. Despite a slight decrease in benchmark home prices year-over-year, the City of Toronto witnessed a larger increase in its home prices compared to the GTA average. The benchmark home price for March 2024 in the City of Toronto was $1,093,300, down by 0.3% year-over-year.
The average home price in the City of Toronto rose to $1,087,017, indicating a 1.4% increase on a month-to-month basis and a 3.1% rise year-over-year. Similarly, the median home price in Toronto climbed to $885,000, marking a 1.1% month-over-month increase and a significant 4.1% rise year-over-year.
Regional Price Variations
While the median home price in the GTA increased by 0.8% month-over-month, the City of Toronto experienced a slightly higher growth rate at 1.1%. However, not all cities within the GTA observed the same level of price growth. Mississauga, for instance, saw a substantial 5.6% month-over-month increase in median home prices, while Oshawa witnessed a slight decrease of 0.9% during the same period. Brampton experienced a notable decline of 1.7% in median home prices from February 2024.
In terms of average home prices, Brampton's market remained relatively stable compared to the previous year, with just a 0.2% decrease at $1,028,297. Conversely, Mississauga's average price surpassed $1 million, reaching $1,056,300, reflecting a 1.9% year-over-year increase and a significant 6.0% jump from the previous month.
Property Types and Market Dynamics
In March 2024, the average price of detached homes in the GTA was $1,466,397, showing a minor 0.2% decrease year-over-year but a 1.6% increase month-over-month. Semi-detached homes witnessed a 3.1% year-over-year increase in prices, averaging $1,121,645, albeit with a marginal 0.2% decrease compared to the previous month.
Freehold townhouses maintained stable prices at $1,039,124, with a slight 0.2% year-over-year increase. However, apartment prices experienced a 0.5% year-over-year decrease, averaging $700,046.
Future Outlook and Market Dynamics
Despite ongoing fluctuations, the Toronto housing market anticipates potential relief for homebuyers in the near future. Forecasts suggest a decrease in interest rates as early as June 2024, offering some respite to prospective buyers. Additionally, initiatives such as the allowance of multiplex construction in all Toronto neighborhoods, approved by the Toronto City Council in 2023, signal a course for increased housing supply in the city.
However, challenges persist, with March 2024 witnessing the lowest level of GTA home sales since 2009, particularly in condo sales. Despite this, the average sales price to listing price ratio increased to 102%, indicating that homes sold for more than their asking prices on average, a significant shift from the 98% ratio observed the previous month.
Toronto Housing Market Forecast 2024
According to the data released by GTA REALTORS®, March 2024 saw a slight dip in home sales compared to the previous year, attributed in part to the timing of the Good Friday holiday. Despite this, the market remained competitive, with a moderate increase in average home prices.
Market Trends
In March 2024, GTA REALTORS® reported 6,560 home sales through TRREB’s MLS® System, marking a 4.5 percent decline from March 2023. However, new listings experienced a notable 15 percent increase over the same period. On a seasonally adjusted basis, sales were down by 1.1 percent, while new listings saw a three percent decrease compared to February.
The first quarter of 2024 concluded with sales up by 11.2 percent year-over-year, indicating a gradual improvement in market conditions. This increase was complemented by a greater annual rise of 18.3 percent in new listings.
Price Analysis
The MLS® Home Price Index (HPI) Composite benchmark showed a modest 0.3 percent increase year-over-year, while the average selling price rose by 1.3 percent to $1,121,615. On a seasonally adjusted month-over-month basis, both the MLS® HPI Composite and the average selling price experienced slight gains, up by 0.2 percent and 0.7 percent respectively compared to February.
Looking ahead, experts anticipate accelerated price growth during the spring, with further increases expected in the second half of the year. This projection is based on the anticipation of sales growth catching up with listings, resulting in tighter market conditions.
Market Outlook
TRREB President Jennifer Pearce highlighted the potential for increased sales and tighter market conditions, driven by lower borrowing costs in the near future. Similarly, TRREB Chief Market Analyst Jason Mercer emphasized the role of lower borrowing costs in fueling heightened demand for ownership housing.
As demand for housing, both ownership, and rental, continues to rise, supply remains a top concern. TRREB CEO John DiMichele emphasized the importance of government focus on innovative solutions to increase housing supply and improve affordability. These solutions include removing barriers to non-traditional arrangements and encouraging gentle density, such as multiplexes, to meet housing supply targets.
Will the Toronto Housing Market Crash?
Looking Ahead: As we delve into the Toronto housing market forecast for 2024, the prevailing trends indicate a resilient and adaptable market. While challenges like higher borrowing costs persist, the proactive measures taken by homebuyers and the real estate industry suggest a market that is poised for growth. With an optimistic outlook for the second half of the year and anticipated lower interest rates, the Toronto housing market seems positioned for continued stability and expansion.
Sources:
- https://trreb.ca/index.php/market-news/market-watch
- https://wowa.ca/toronto-housing-market
