August 2024 Newsletter

Real Estate Market Update

GTA June Stats and 2024 Market in review

June 2024 home sales in the Greater Toronto Area (GTA) were lower compared to the same month last year, according to the Toronto Regional Real Estate Board (TRREB). Despite the Bank of Canada rate cut at the beginning of last month, many buyers kept their home purchase decisions on hold. The market remained well-supplied, resulting in a slight dip in the average selling price compared to June 2023.
“The Bank of Canada’s rate cut last month provided some initial relief for homeowners and home buyers. However, the June sales result suggests that most home buyers will require multiple rate cuts before they move off the sidelines. This follows Ipsos polling for TRREB, which suggested that cumulative rate cuts of 100 basis points or more are required to boost home sales by any significant amount,” said TRREB President Jennifer Pearce.
The MLS® Home Price Index Composite benchmark was down by 4.6 per cent on a year-over-year basis in June 2024. The average selling price of $1,162,167 was down by 1.6 per cent over the June 2023 result of $1,181,002. 
“The GTA housing market is currently well-supplied. Recent home buyers have benefitted from substantial choice and therefore negotiating power on price. Moving forward, as sales pick up alongside lower borrowing costs, elevated inventory levels will help mitigate against a quick run-up in selling prices,” said TRREB Chief Market Analyst Jason Mercer.

Despite the two -0.25% rate changes in June and July, the housing market hasn’t responded as predicted. When polled, potential buyers stated that they’d need to see a minimum of a further -1.75% change in order to consider purchasing property. In other words, they are waiting for a return to the ultra-low rates we’ve enjoyed over the past several years. Unfortunately for them, most pundits do not foresee this happening because of the inflationary conditions these borrowing rates helped create. The next BOC rate announcements are September 4th, October 23rd and December 11th. After the seasonal summer slump in real estate activity, a lot hangs on the Fall 2024 rate announcements.
 
With inventory accumulating and clearing out very slowly, the real estate market is being pushed toward a balanced - or even buyer’s (GASP!) market in most segments. Condos continue to be the hardest hit because of a surge in inventory as small investors continue to unload holdings in the face of cash-negative carrying costs vs rents. In the detached market segment, the number of sales has declined overall from 2023, but surprisingly prices have remained reasonably stable. By the end of the year, price forecasts predict slight increases, along with renewed market activity as more mortgages come up for renewal.
 
Market highlights:
Buyers

• Increased inventory: more properties to choose from 
• Fewer properties listed with offer dates
• Less competition among buyers: increased bargaining power

Sellers

• Expect longer time to sell: “Days on Market” has increased for detached properties to 18 days, and condos to 27
• Buyers are increasingly choosy: price and presentation matter more than ever!
• Be prepared for conditional offers: most common conditions are buyer financing and property inspection