GTA REALTORS® Release February 2024 Stats
“TORONTO, ONTARIO, March 5, 2024 – Greater Toronto Area (GTA) home sales and new listings were up on an annual and monthly basis in February 2024. Selling prices also edged upward compared to a year earlier. Population growth and a resilient regional economy continued to support the overall demand for housing. Higher borrowing costs kept home sales below the February sales record reached in 2021.
“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. 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,”
said TRREB President Jennifer Pearce.
REALTORS® reported 5,607 GTA home sales through TRREB’s MLS® System in February 2024 – an increase of 17.9 per cent compared to February 2023. Even after accounting for the leap year effect, sales were up by 12.3 per cent year over-year. New listings were up by an even greater annual rate than sales in February, pointing to increased choice for buyers. On a seasonally adjusted month-over-month basis, February sales were lower following two consecutive monthly increases while new listings were flat. Monthly figures can be somewhat volatile, especially when the market is approaching a transition point.
Home selling prices in February 2024 remained similar to February 2023. The MLS® Home Price Index Composite benchmark edged up by 0.4 per cent. The average selling price of $1,108,720 increased by a modest 1.1 per cent. On a seasonally-adjusted monthly basis, both the MLS® HPI Composite and the average selling price edged upward.
“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. In the second half of the year, lower interest rates will further boost demand for ownership housing. First-time buying activity will also be a contributing factor, as many renters look to trade high monthly rents for a long-term investment in which they can live and build equity,”
said TRREB Chief Market Analyst Jason Mercer.
“Population growth has been at a record pace and with the anticipated lower borrowing costs, the demand for housing – both ownership and rental – will also increase over the next two years. Unaffordable housing not only has a financial impact but also a social impact. Recent research conducted for TRREB by CANCEA in our 2024 Market Outlook and Year in Review report underscores the negative impact of unaffordable housing on peoples’ mental health and life satisfaction. It’s comforting to see that there has been some real building happening in the GTA and that the provincial government is rewarding those municipalities that are working to eliminate the red tape and meet those homeownership needs,”
said TRREB CEO John DiMichele.
This is the monthly indication of the average sales prices of single family homes (all property types) in the GTA:
2021
$932,297 January 1st
$966,001 January 31st
$1,044,910 February
$1,097,319 March
$1,090,414 April
$1,108,137 May
$1,089,012 June
$1,061,653 July
$1,070,176 August
$1,135,027 September
$1,155,624 October
$1,162,564 November
$1,157,837 December
2022
$1,157,837 January 1st
$1,242,407 January 31st
$1,334,021 February (all time peak)
$1,298,705 March
$1,250,704 April
$1,210,372 May
$1,145,796 June
$1,073,213 July
$1,078,999 August
$1,086,456 September
$1,087,590 October
$1,079,420 November
$1,051,409 December
2023
$1,051,409 January 1st
$1,036,925 January 31st
$1,107,018 March
$1,152,519 April
$1,195,546 May
$1,181,067 June
$1,116,927 July
$1,082,797 August
$1,118,215 September
$1,124,394 October
$1,080,856 November
$1,085,380 December
2024
$1,085,380 January 1st
$1,026,239 January 31st
$1,108,720 February
What usually happens each year? The market starts off in January, rises in February, gains momentum in March and April and reaches its peak for the year in May. The market declines in June, declines in July and then bottoms out in August. In September, it reverses itself and rises once again, and in October, it reaches its second peak for the year. In November, the market declines, as it does again in December, and the cycle repeats itself the following year.
The overall market peak took place at the end of February 2022. Then, we had a series of significant increases in the Bank of Canada rate.
The Buyers out there have the same amount of money that they had before, however, now more money will be going to the Banks for interest on mortgages than to the Sellers.
Price Decline
You will notice that there was a considerable price decline, which began reversing in August 2022. Buyers wanted to wait until the market had bottomed out. So, they waited. In January, June and July 2023, the Bank of Canada increased interest rates and also stated that the process was now complete (at least, for now).
All the governments seemed to be focused on lowering prices. There were all kinds of new taxes imposed by federal, provincial and municipal governments in 2022 and 2023. None of them worked. But, raising interest rates worked magically and reduced prices by as much as 20% since February 2022.
Sales Activity
Buyers have been sitting on the sidelines until the Bank of Canada stopped raising interest rates. Obviously, it’s time to jump back in again. We are likely to see increasing prices going forward, subject of course, to the annual predictable fluctuations.
Sellers were holding back, not prepared to enter a falling market, so, we have a general shortage of listings.
Bank of Canada Rates
These are the rates as of 6 March 2024:
| Date* March 6, 2024 | Target (%) 5.00 | Change (%) —- |
| January 24, 2024 | 5.00 | — |
| December 6, 2023 | 5.00 | — |
| October 25, 2023 | 5.00 | — |
| September 6, 2023 | 5.00 | — |
| July 12, 2023 | 5.00 | +0.25 |
| June 7, 2023 | 4.75 | +0.25 |
| April 12, 2023 | 4.50 | — |
| March 8, 2023 | 4.50 | — |
| January 25, 2023 | 4.50 | +0.25 |
| December 7, 2022 | 4.25 | +0.50 |
| October 26, 2022 | 3.75 | +0.50 |
| September 7, 2022 | 3.25 | +0.75 |
| July 13, 2022 | 2.50 | +1.00 |
| June 1, 2022 | 1.50 | +0.50 |
| April 13, 2022 | 1.00 | +0.50 |
| March 2, 2022 | 0.50 | +0.25 |
| January 26, 2022 | 0.25 | — |
| December 8, 2021 | 0.25 | — |
*As of 2021, a change takes effect the day after its announcement.
It’s important to appreciate that the Bank of Canada rate has gone from 0.25% to 5.00%. That’s TWENTY Times! That’s the single most significant factor in the marketplace. Everyone is on pause until the new numbers settle in. Buyers who thought they could afford a detached home can only afford a townhouse, now that they factor in their increased mortgage payments.
The Market has Bottomed out and we are on a Rise Again
Buyers are back to bidding wars and Sellers are gradually starting to return. Both listings and home sales were up in February 2024 and multiple offers have come back.
For the month of February, Listings were up to 11,396, which is 33.5% more than February 2023. Sales were up to 5,607 which was 17.9% higher than February of last year.
Two Simultaneous Market Trends
At the present time, we have two trends in the market both working at the same time:
- rising interest rates bringing the prices down, and
- supply shortage bringing the market up.
The rising interest rates effectively worked from early 2022 to mid 2023, but now that is over and we are now back to rising prices. It takes a few months to get started. If you recall the ‘70’s and ‘80’s, rising real estate prices were fuelled by inflation. We haven’t seen that for a while, but if it returns, it’s better to own real estate than being in a position where you are attempting to buy it.
Long Term Performance
It’s unfortunate, that the media hasn’t written about this yet. Over the longer term, real estate has proven to be an excellent investment. They will in time.
Here are the annual returns if you owned property (single family home in the GTA) from the following dates:
28 February (or the 29th) until 29 February 2024
Year Value % Increase Annual %
2014 $553,193 100.42 10.42
2015 $596,163 85.98 9.55
2016 $685,278 61.79 7.72
2017 $875,983 26.57 3.80
2018 $767,818 49.61 8.27
2019 $780,397 42.07 8.41
2020 $910,290 21.80 5.45
2021 $1,045,488 6.05 2.02
2022 $1,334,021 -16.88 -8.44
2023 $1,096,157 1.15 1.15
2024 $1,108,720 —- —-
The 10 year performance is a solid 10.42% annually. The interference with performance took place in March 2022 when interest rates started to increase. Coincidentally, the highest real estate values that we have seen, took place in the previous month, February 2022. Then, the interest rates went up 20 times. So, if you are looking for any explanation anywhere about what happening in the market, that’s it.
For the Historians
You will notice that the average rate of return, if we were to combine the annual returns for the full decade work out to 4.84%. That’s interesting because that was approximately the rate of return noted in the Doomesday Book in 1086, citing a property which had doubled in value over twenty years, producing a 5% annual rate of return.
If you would like to discuss the market, please give me a call at 647-404-8150.
Brian Madigan LL.B., Broker