February 2024 Market Update

What Trends are we Seeing?

Some dizzying statistics about the cost of real estate in Canada, Toronto and the Greater Toronto Area (GTA) were delivered to us for the month of February 2024.  According to a Point 2 Homes report more than half the homes for sale in the GTA in February 2024 were priced above $1,000,000.  The illustration below shows the breakdown of the Point 2 Homes study that reviewed 70 cities across Canada.

Richmond Hill was fourth on the list with 63.5 per cent, Newmarket was sixth (61 per cent) while Vaughan (58.6 per cent), Markham (58.3 per cent) Brampton (51.6 per cent) and Whitby (50.3 per cent).

Expanding the search up the price point continuum we find that properties above $4,000,000 in Oakville, Vaughan, Milton and Markham had between five and seven per cent of its listings at or above that price point.

Stepping back and looking at things with a long-term perspective we see the cost of real estate over the last 10 years as a consistent escalation.  While it has felt like a turbulent last 24 to 36 months, the Benchmark Home Price in Ontario shows stability for the most part.

Focusing in on a more traditional analysis of market activity for February 2024 we noted that the number of sales year-over-year were up 17.9 per cent and that the number of new listings increased by 33.5% year-over-year as illustrated below.

From an average price perspective when comparing February 2023 to February 2024 it remained essentially the same with a 0.44 per cent increase.

What Lies Ahead?

What is happening on the ground in the day-to-day of our activities is that we are seeing consistent multiple offer situations develop depending on the area, product type and price point.  Generally, product below the $1,500,000 is generating the increased activity, especially if it is turn-key product for buyers to purchase.  Much of this activity has been spurred by the expectations of interest rate adjustments at some point over the duration of 2024.

Expectations for 2024 are most notably determined on the timing and magnitude of the interest rate adjustment.  The CPI inflation eased to 2.9 per cent in January as the goods price inflation moderated.  Notably, the cost of shelter remained elevated and is the biggest contributor to inflation.  The Bank of Canada continues to have expectations that inflation will remain closer to 3.0 per cent until mid-2024.  Bank of Canada inflation expectations and corresponding interest rate decisions are driven by Gross Domestic Product (GDP) and employment figures.  Real GDP expanded in the fourth quarter of 2023 by a modest 1.0 per cent after having contracted by 0.5 per cent in the third quarter of 2023.  Canada’s unemployment rate in February 2024 was 5.8 per cent; very similar to the prior month.  Notable however is that employment gains came primarily from the public sector which offset losses among Canadian businesses last month.  The shows that the labour market has been propped up by government hiring.  Over the last year, employment in the public sector has grown 4.7 per cent, versus 1.2 percent in private industry.  Should we see moderate GDP growth or losses in conjunction with private sector employment demand drop; interest rate adjustments will shortly follow.

The Toronto and GTA real estate market has historically operated somewhat outside of expectations based on market indicators.  The most recent evidence of this is that consumer confidence on the basis of expected rate cuts has already impacted the pace of the real estate market.  It is our expectations that the market will continue to react to consumer confidence rather than documented rate changes.

What this means for buyers is that there may be at all price points and product types a more expensive entry level than currently exists.

For sellers, with buyer anticipation and excitement, depending on the product type given that we have seen a notable increase in new listings already in 2024 it may be beneficial to present your property on the market sooner than later in terms of beating competing sellers to the market.

What is Happening with Sale Prices

Number of Transactions Trend

When comparing February 2024 to February 2023, we saw the following trend:

When comparing February 2024 to January 2024, we saw the following trend:

Looking into the different geographic pockets of Toronto and the GTA we notice the following changes in number of transactions when comparing February 2024 year-over-year to February 2023 and month-over-month to January 2024. The breakdown per area and product type are as follows:

Footnote: Source of statistical data is from the February 2024 and January 2024 Market Watch report of the Toronto Region Real Estate Board (TRREB) MLS.

A – Monthly Percentage Change in the Number of Units Sold

B – Month Over Month Average Price Percentage Change

C – Seasonally Adjusted Month Over Month Average Price Percentage Change

D – Monthly Percentage Change in Average Sale Price