November2024 Stats – Market Update

What Trends are we Seeing?

The Toronto Regional Real Estate Board (TRREB) has now seen two 40 per cent plus increase in number of transactions for the past two months on a year-over-year basis.  With November 2024 number of transactions exceeding that of November 2023 by 40.1 per cent the term “inflection” point associated with October 2024s 44.4 per cent increase in sales year-over-year has now turned into a more definitive “rebounding”.  This is underscored by the Sales to New Listing Ratio (SNLR) reported at 51 percent.  The SNLR is a measure of a buyer, balanced or seller’s market.  Sitting at 51 percent the market has moved into balanced market territory and is trending toward a seller’s market.  Across all categories of housing types (detached, semi-detached, townhouse and condo/apartment) for both the Toronto and the Greater Toronto Area (GTA), on a year-over-year basis, we saw an increase in the number of transactions with the highest increase found in Toronto townhouses, at 51.1 percent, and the lowest increase in Toronto semi-detached, at 24 percent.

Average selling price across the TRREB rose 2.6 per cent year-over-year.  The condo/apartment segment of the real estate market continued to see a decrease in average price for both Toronto and the GTA.  In the GTA average price increased year-over-year in all other segments.  In Toronto average prices decreased in the townhouse segment in addition to the condo/apartment segment.

What we are seeing is that the showing count and number of offers registered on a week-by-week basis is not tapering off as might otherwise occur in a more traditional year.  Two factors are likely driving this unseasonably active market are i) consumer expectation of a December 11^th rate decrease by Bank of Canada (BoC) and ii) regulatory changes around first-time buyers, pre-construction purchases and insured mortgages coming into effect December 15^th.

What Lies Ahead?

Swaps markets pricing in 80 per cent chance of a 50-basis point BoC reduction on December 11^th.

At some point Gross Domestic Product (GDP) and inflation are going to take issue with their cousin named unemployment always stealing the show.  Up until Friday December 6^th the GDP and inflation figures left most markets looking to the unemployment report as being the tipping point to the guidance the BoC was looking for in their decision between a 25-basis point or 50-basis point reduction on the BoC rate announcement scheduled for December 11^th.  Note that holding par for the course wasn’t even on the table.  Unemployment delivered with a 6.8 per cent figure for November 2024; up from 6.5 per cent in October.  Underscoring the concern around the unemployment figures was that the proportion of working-age people looking for work rose by 0.9 per cent and that 46.3 per cent of those unemployment in November hadn’t work in the last year or never worked; that should keep the BoC up at night.

GDP helped set the stage though.  The economy grew by an annualized rate of one per cent in the third quarter.  Underscoring the GDP figure was that government spending represented 1.1 per cent of the growth in the third quarter across all levels of government; meaning GDP would have been negative if not for government spending.  On a per capita basis it was the sixth consecutive quarterly drop (0.4 per cent) and the eight of the last nine quarterly per capita drops.  From a housing perspective i) housing investment increased by 0.9 per cent driven by the resale market ii) renovations declined by 0.4 per cent and iii) new construction decreased by 0.1 per cent.

Inflation was the only figure of the bunch which was cheerleading for a 25-basis point adjustment on December 11^th.  Five out of eight of the key components of the Consumer Price Index (CPI) increased resulting in a 2.0 per cent increase to October’s inflation reading.  With core inflation having risen higher than expected many were hedging to a 25-basis point BoC rate reduction on December 11^th.

With TRREB figures showing a revitalization in the real estate market as buyers step into the limelight again, an expected 50-basis point rate reduction from the BoC, and incoming legislative changes making it easier for purchasers to take action we expect to see a derailing of the typical December and January months.  Given that in Toronto and the GTA the $1.0 million figure defines being able to purchase a condo versus a freehold, when accounting for the above noted factors, we expect the bread and butter of the real estate market to heat up.

From a buyer perspective we reiterate last months message and continue to encourage a focus on finding the right property to purchase or invest in over the near-term.  The Toronto and GTA markets are known for their quick turnaround and we rather you be looking with comfort in the rear view mirror at your purchasing decision before affordability worsens.

From a seller perspective we encourage preparation to act when it becomes apparent that the real estate market isn’t just rebounding but taken flight.  Depending on your next steps, the version of selling sooner versus later can be determine with a short consultation; feel free to call and connect.

What is Happening with Sale Prices

Number of Transactions Trend

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

When comparing November 2024 to October 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 November 2024 year-over-year to November 2023 and month-over-month to October 2024. The breakdown per area and product type are as follows:

Footnote: Source of statistical data is from the October 2024 and November 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