A PROGRESSIVE MARCH: WHAT’S HAPPENING IN THE MARKET?

The latest report on March 2024 home sales through TRREB’s MLS® System shows steady progress in the real estate market despite the lower sales compared to March 2023. One of the contributing factors to this decline is the statutory holiday Good Friday, which fell in March this year instead of April last year. However, there was enough competition between buyers, leading to a moderate increase in the average March home price.

The Greater Toronto Area (GTA) REALTORS® recorded 6,560 sales through TRREB’s MLS® System in March 2024, a 4.5% decline compared to March 2023. But, new listings increased by 15% over the same period. On a seasonally adjusted monthly basis, sales were down by 1.1%, and new listings were down by 3% compared to February.

The first quarter of 2024 ended with sales up by 11.2% year-over-year and new listings up by an even higher annual rate of 18.3%. The market conditions have been gradually improving over the past few months. More buyers have adjusted to the higher interest rate environment, and homeowners anticipate an improvement in the market conditions in the spring, leading to a marked increase in new listings.

Assuming we benefit from lower borrowing costs in the near future, sales will increase further, new listings will be absorbed, and tighter market conditions will push selling prices higher. The MLS® Home Price Index (HPI) Composite benchmark was up 0.3% year-over-year, and the average selling price was up 1.3% to $1,121,615. On a seasonally adjusted month-over-month basis, the MLS® HPI Composite was up by 0.2%, and the average selling price was up by 0.7% compared to February.

Price growth is expected to accelerate during the spring, and even more so in the second half of the year, as sales growth catches up with listings growth and sellers’ market conditions start to emerge in many neighbourhoods. Lower borrowing costs in the coming months will help fuel increased demand for ownership housing.

As demand for ownership and rental housing increases, supply will continue to be top of mind. Governments at all levels must maintain their focus on pursuing innovative solutions to increase the amount and mix of housing supply to improve affordability. Encouraging gentle density, including multiplexes, is critical to helping high-demand areas such as the Greater Golden Horseshoe to meet housing supply targets. Removing roadblocks to non-traditional arrangements, such as co-ownership models, will also benefit homebuyers, including first-time buyers and seniors.