Toronto’s housing market might finally be getting over its slump

Heading into 2024, interest rates are still high and experts are still forecasting a few more tough months of Toronto’s housing slump. But the end of 2023 and beginning of this month have brought some promising signs — most of which point to a potential market recovery.

Recent reports found that Toronto and the whole of Canada closed out 2023 with an unexpected surge that surpassed the same period the previous year. A report from Royal LePage saw that the national aggregate home price increased 4.3 per cent year over year in the fourth quarter, and 5.1 per cent in the GTA to $1,123,300. 

While this was a 2.1 per cent decline quarter-over-quarter, a trend that the country saw in 81 per cent of regional markets, the fourth quarter surge points to a positive upwards trend for the year ahead.

In the GTA, it was condos that led the way, with a 5.4 per cent increase in the median price of a condominium to $719,900 in Q4 of 2023 compared to Q4 of 2022. Single family detached homes saw a more modest increase — 3 per cent year-over-year to $1,373,800.

In the city of Toronto, the aggregate price of a home increase 3 per cent to $1,119,000, with a 5.6 per cent increase in the median price for single family detached homes and just 2.7 per cent for condos. 

“Through the second half of 2023, sales activity in the region steadily declined allowing a small cache of inventory to build up,” Karen Yolevski, chief operating officer of Royal LePage Real Estate Services said. “Despite this, home prices only dipped modestly during that time, due to a coinciding drop in demand as would-be buyers remained sidelined, waiting for interest rates to come down. And still, prices have remained above 2022 levels.”

Royal LePage is forecasting a 6 per cent year-over-year increase increase in the GTA aggregate home price by Q4 of 2024, which would see the home price hit $1,190,698.

The Canadian Real Estate Association (CREA) reported a similar surge, with home sales jumping 8.7 per cent month-over-month in December and the actual (not seasonally adjusted) number of transactions increasing 3.7 per cent compared to December 2022 — the largest year-over-year gain since August. 

And while the CREA report noted that the rebound was likely due to “sellers and buyers that were holding onto unrealistic pricing expectations last fall finally coming together to get deals done before the end of the year,” they also updated their forecast for home sales and average prices this week. The new forecast expects 489,661 residential properties to trade hands in Canada in 2024, a 10.4 per cent increase from 2023.

There’s even some positive movements when it comes to housing starts — the Canadian Mortgage and Housing Corp. said the monthly seasonally adjusted annual rate of housing starts rose 18 per cent in December to 249,255 units compared to November. While the increase is largely due to gains in Vancouver and Montreal, and was hindered because of declines in multi-unit starts in Toronto, things are looking up for the country this year.