GTA home prices expected to drop in 2024: Re/Max report
Published Tuesday, November 28, 2023 11:08AM EST
Last Updated Tuesday, November 28, 2023 11:28AM EST
Home prices in the Greater Toronto Area are expected to slide once again next year, according to a new report from one of the country’s largest real estate brokerages.
In a report published on Tuesday, Re/Max said it is predicting prices to dip in the GTA by three per cent in 2024. This comes as the average sale price dropped by 5.9 per cent in 2023.
While a price decline is in the forecast, a surge in home sales is also expected. According to the brokers and agents surveyed for the report, home sales in the GTA are expected to rise by more than 10 per cent next year. This uptick follows a 13.5 per cent drop in sales in 2023.
“Not unlike other regions across the country, inflation and the interest rate environment has had the largest impact on homeowners across the GTA, and this is expected to remain prevalent into 2024, Cameron Forbes, CEO and General Manager/Broker at RE/MAX Realtron Realty Inc., said in a written statement.
“This has forced many buyers and sellers to take a ‘wait-and-see’ approach in the latter half of 2023. Given this, activity is poised to increase through the year with the anticipated plateauing and reduction in interest rates.”
A series of interest rate hikes by the Bank of Canada over the last two years has led borrowing costs to skyrocket for many current and prospective homeowners, leading to period of lower sales activity. Some experts are predicting that the Bank of Canada could begin cutting interest rates as early as the second quarter of 2024.
While Toronto has typically been a “seller’s market,” it is expected to transition to a “buyers/ balanced market” next year, the report notes.
“The GTA market is anticipated to gain balance in 2024 but is also expected to favour buyers at certain points of the year,” according to the report.
“Considering the interest rate environment and the cost of living this year, housing market conditions in 2023 have fluctuated. As interest rates have recently paused, many markets are stabilizing with several regions in Ontario (61 per cent), expected to remain unchanged in 2024 from their current market conditions.”
According to the report, Niagara, Mississauga, Durham Region, Brampton, Grand Bend, North Bay, Muskoka, Haliburton, and Kingston are among the Ontario regions that are currently considered to be "buyers' markets."
Hamilton and Burlington have experienced "varying conditions throughout the year," the report notes, but both have "shifted toward buyer’s markets in Q4 of 2023."
"Looking ahead to next year, Mississauga, Brampton, Simcoe County, Muskoka and Haliburton are likely to balance out," the report states.
Re/Max is predicting prices to rise by an average of 0.5 per cent nationally in 2024.
“The slower market we’ve been experiencing across the country this fall could be an early indicator of an active 2024, as reflected in the modest price increase and sales outlook for next year, and the balancing of conditions in several regions across the country,” Christopher Alexander, president of Re/Max Canada, said in a written statement.
The average price of a home across all property types in the GTA peaked at $1,334,062 in February 2022, according to data from the Toronto Regional Real Estate Board.
The latest data from October suggests that the average price in the GTA now stands at 1,125,928 after a 3.5 per cent increase over the previous 12 months.