Home sales surge in Toronto as buyers return to the market

The second month of 2024 brought another increase in sales and listings year-over-year, pointing to a “market assumption” that rate hikes are over, a new report from the Toronto Regional Real Estate Board (TRREB) found.

Sales increased 17.9 per cent in February compared to the same month in 2023 — and though this year the month had an extra day, even accounting for the “leap year effect,” sales were up 12.3 per cent year-over-year.

New listings increased at an even greater rate than sales, with a 33.5 per cent jump compared to February 2023.

Month-over-month on a seasonally-adjusted basis, February sales this year were down after two monthly increases and new listings were flat, but TRREB noted that “monthly figures can be somewhat volatile, especially when the market is approaching a transition point.”

While sales and listings are bouncing back in the GTA, the average selling price has remained almost flat — the current average price of $1,108,720 increased by just 1.1 per cent year-over-year. In Toronto, the average price of detached homes and townhouses both decreased by over 3 per cent year-over-year, while semi-detached home prices increased 2.4 per cent and condo apartments remained almost flat. In the 905, semi-detached homes fared even better, increasing by 5.2 per cent, and the detached home average price increased by 1.7 per cent. The average condo apartment price, on the other hand, declined by 3.4 per cent.

It appears semi-detached homes have been generating the most interest on the Toronto market, with sales increasing 26.6 per cent year-over-year. In the 905, it was townhouses and detached homes that saw the largest increase in sales, 26.5 per cent and 21.7 per cent, respectively. Overall, townhouses and detached homes fared the best in the GTA — both segments of the market saw sales increases over 20 per cent.

TRREB credits this resurgence in sales to the anticipation of rate cuts in the future.

“As we move through 2024, an increasing number of buyers will re-enter the market with adjusted housing preferences to account for higher borrowing costs,” TRREB chief market analyst Jason Mercer said. “In the second half of the year, lower interest rates will further boost demand for ownership housing.”

The report also predicted that first-time home buyer activity will contribute to more activity in the market, as renters will consider trading in high monthly renters for a long-term, equity-building investment.

TRREB president Jennifer Pearce suggested that buyers have looked to other options to be able to enter the market: “To minimize higher monthly payments, some buyers have likely saved up a larger down payment, chosen to purchase a less-expensive home type and/or looked to a different location in the GTA.”

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