The Greater Toronto Area (GTA) housing market witnessed a strong surge in activity throughout February, setting an optimistic tone for the region's real estate market as we move into Spring. With a total of 5,607 homes sold, representing an impressive 33% increase from the previous month and a notable 17% rise compared to the same period last year, the market demonstrated renewed vigour. Heightened sales activity translated into a substantial uptick in property prices, with the average home fetching $1,108,720—an impressive monthly increase of $82,017. Notably, this 8% gain marks the largest month-over-month increase since February 2022.
Across all asset classes, there were notable gains in both average sales prices and total monthly sales, signalling a robust start to the year as compared to 2023. Responding to this heightened demand, sellers have re-entered the market with listings, resulting in a monthly total of 11,102 active listings, a 15% yearly increase that offers promise for bolstered inventory levels in 2024, following a year of anemic supply.
The increase in sales was noted by TRREB President Jennifer Pearce, “We have recently seen a resurgence in sales activity compared to last year. The market assumption is that the Bank of Canada has finished hiking rates. Consumers are now anticipating rate cuts in the near future. A growing number of homebuyers have also come to terms with elevated mortgage rates over the past two years.”
Prospective buyers who had been biding their time in anticipation that lower interest rates would lead to an easier path to home ownership in the latter half of 2024 may be met with a different reality, as a recent article in The Globe and Mail suggests interest rate decreases could potentially exacerbate already climbing home prices. “As the bank inches toward easing monetary policy, shelter price inflation and a jumpy real estate market remain the key challenge. Rising mortgage-interest costs, which are directly tied to the bank’s past rate decisions, are the single biggest driver of overall inflation. But interest-rate cuts, which would offer some relief to homeowners with mortgages, will likely push home prices higher, further eroding housing affordability.”
Delving deeper into specific asset classes across the GTA, the trends in price appreciation and market activity were widespread. The detached market emerged as a frontrunner, with the average sale price surging by $92,784, accompanied by a 43% increase in total sales to 2,495. Similarly, the semi-detached market witnessed substantial gains, with values soaring by $85,593, driving the average sales price to $1,123,896, and a 35% monthly increase in sales to 463.
In the townhouse market, prices rose by $70,507, reaching an average sales price of $1,034,011, fueled by a remarkable absorption rate of nearly 90% and a 25% monthly increase in sales to 1,016. Similarly, the condo market saw a monthly price increase of $13,366, with the average sale price reaching $695,345, accompanied by a 19% increase in sales to 1,586.
As home prices begin their upward trajectory across the GTA, a recent study conducted by Royal LePage sheds light on the purchasing power of $1 million across Canada. “Years ago, a $1-million budget could buy a generous amount of square footage and access to sought-after neighbourhoods in almost any market,” said Karen Yolevski, chief operating officer of Royal LePage Real Estate Services Ltd. “Over time, however, we have watched the purchasing power of $1 million vary more widely between cities. These days, this budget can buy a luxurious detached home in one location, or a two-bedroom condominium in another.”
Overall, the GTA housing market's performance in February underscores the demand for housing in Canada's most populous region. As we march towards a decrease in interest rates and increased competition in the market, the advice and expertise of a real estate professional well-versed in current market dynamics will be the consumer's biggest asset.
If you would like to understand how these statistics relate to your specific situation or if you're curious about the current value of your property or your affordability for a new purchase, please don't hesitate to reach out.
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