Housing Market Shows Momentum Amidst Rising Prices: TREBB

Last month, the Toronto Regional Real Estate Board (TRREB) unveiled its latest Market Watch Report, which offered insights into Toronto’s housing landscape.

According to TREBB, despite ongoing challenges, there has been movement with January 2024 seeing an uptick in both sales and new listings on a month-over-month seasonally adjusted basis.

TREBB noted that while prices continue their upward trend, there’s “optimism brewing” as a result of lower borrowing costs from fixed-rate mortgages.

Data from Property.ca and Condos.ca, part of the Right at Home Realty network, also revealed promising momentum for the upcoming spring market. Viewing requests have surged by 38 per cent compared to last year, with offer submission requests following suit with an 11 per cent increase, according to TREBB.

“We had a positive start to 2024. The Bank of Canada expects the rate of inflation to recede as we move through the year. This would support lower interest rates which would bolster home buyers’ confidence to move back into the market. First-time buyers currently facing high average rents would benefit from lower mortgage rates, making the move to homeownership more affordable,” said TRREB president Jennifer Pearce.

According to the report, there were 4,223 sales reported through TRREB’s MLS System in January 2024; which was an increase of more than one-third in comparison to January 2023. The number of new listings was also up year-over-year but by a lesser annual rate of approximately six per cent.

The report also revealed that stronger sales growth relative to listings suggested that buyers experienced tighter market conditions compared to a year ago.

TREBB noted that both sales and new listings were up on a month-over-month seasonally adjusted basis. Additionally, sales increased more than listings which indicates market conditions tightened relative to December 2023.

“Once the Bank of Canada actually starts cutting its policy rate, likely in the second half of 2024, expect home sales to pick up even further. There will be more competition between buyers in 2024 as demand picks up and the supply of listings remains constrained. The end result will be upward pressure on selling prices over the next two years,” said TRREB chief market analyst Jason Mercer.

TREBB noted that the MLS Home Price Index Composite in January 2024 was down by less than one per cent year-over-year in January. The average selling price was down by one per cent year-over-year to $1,026,703. On a month-over-month seasonally adjusted basis, both the MLS HPI Composite and the average selling price also trended lower.

“While housing market conditions are expected to improve with lower borrowing costs, there are still a number of policy issues that need to be addressed. At the federal level, more reflection on the Office of the Superintendent of Financial Institution (OSFI) mortgage stress test is required, especially to its application at different points in the interest rate cycle. The focus for the Province needs to remain on building 1.5 million new homes. At the municipal level, raising property taxes without consistent support from the federal and provincial governments won’t eliminate Toronto’s structural deficit. Helping first-time homebuyers get into the ownership market will ease movement across the entire spectrum and relieve pressure on the rental market,” said TRREB CEO John DiMichele.