GTA Home Sales Jump Up As Lower Borrowing Costs Emerge


Houses for sale in Ottawa

Home sales across the Greater Toronto Area (GTA) picked up noticeable steam in January, despite the cold winter months typically seeing a downturn in buyer activity.

The first month of the year saw a total of 4,223 home sales in the GTA, according to the latest data from the Toronto Regional Real Estate Board (TRREB), which is not only up significantly from the 3,444 sales that took place in December (+22.6), but is up even more compared to the 3,083 sales seen in January 2023 (+37%).


This boom comes “as some homebuyers started to benefit from lower borrowing costs associated with fixed-rate mortgage products,” TRREB notes. Interest rates on five-year insured fixed interest rates began slipping below 5% at a number of lenders in Ontario towards the end of December thanks to the bond yield market having cooled in the preceding month.

TRREB President Jennifer Pearce called it a “positive start to 2024,” and hinted at a further bump in demand that will come once the Bank of Canada begins lowering its policy interest rate, which currently sits at 5%.

“The Bank of Canada expects the rate of inflation to recede as we move through the year,” Pearce said. “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.”

The increase in sales was seen across all housing types, with townhomes leading the way with a staggering 54.5% year over year increase. They were closely followed by semi-detached homes (+42.9%) and condo apartments (+41.0%).

As sales grew, so too did listings, with 8,312 new homes coming onto the market in January. However, on a seasonally adjusted basis, the number of new listings did not keep pace with the increase in sales, meaning market conditions tightened last month. TRREB Chief Market Analyst Jason Mercer says he expects this trend to continue.

“There will be more competition between buyers in 2024 as demand picks up and the supply of listings remains constrained,” Mercer said. “The end result will be upward pressure on selling prices over the next two years.”

On the pricing front, things remained relatively flat in January. The MLS Home Price Index (HPI) Composite was down by less than 1% year over year, and the average sale price slipped 1% 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.

But broken down by housing type, all but condo apartments actually saw their average prices increase in January, albeit by small amounts. Semi-detached homes saw a 1.8% increase, followed by detached homes with a 0.8% jump and townhouses with a 0.5% increase. The condo apartment average sale price fell by 0.6%.

In order to restore continued balance to the market, TRREB CEO John DiMichele points to several policy changes that need to be implemented.

“The focus for the Province needs to remain on building 1.5 million new homes,” DiMichele said. “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.”



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