GTA home prices could overtake Vancouver by end of 2024: Royal LePage

Home prices in the GTA are expected to rise 10 percent this year and surpass those in Greater Vancouver by the end of 2024, according to Royal LePage's updated forecast.

In its latest survey, the brokerage said it was updating its national house price forecast after an “expected first quarter.”

Royal LePage said it now expects national aggregate home prices to grow nine percent in the fourth quarter of 2024, up from its previous forecast of 5.5 percent.

“According to our previous forecast, the market reached a significant tipping point in the first quarter of 2024 when house prices started to fall and start to rise again. Rather than adopting a strategy of waiting for mortgage rates to fall, it's clear that more buyers will be driven by rising home prices,” Phil Soper, president and CEO of Royal LePage, said in a written statement.

“After the central bank steps in and the first expected rate cut, albeit by 25 basis points, I expect to see the upward trend in the rate curve. jumps into the market.”

The GTA is expected to see the highest price growth of all major markets in Canada in 2024, the report notes.

In the first quarter of 2024, GTA home prices rose 5.2 percent year-over-year to $1,177,700.

The median price of a single-family detached home rose 3.9 percent year-over-year to $1,454,800 in the first quarter of 2024, while the median price of a condominium rose 3.7 percent to $733,600.

Royal LePage Real Estate Services Ltd. “The first three months of the year have been busier than expected in Toronto and the surrounding areas,” said Karen Jolewski, chief operating officer of the company, accompanying the survey.

“After the Bank of Canada reversed course part way through its steep interest rate hike campaign, warm winter weather and expectations of tougher competition have prompted some buyers who were put off last year to re-enter the market with renewed purpose.”

While the report notes that home prices in many areas “have yet to fully recover from the post-pandemic correction,” national aggregate home prices are “well above” pre-pandemic levels.

According to data from the Toronto Regional Real Estate Board (TRREB), the median sales price of a home across all property types in Toronto peaked at $1,334,062 in February 2022, then fell to $1,037,542 at the end of the year.

The GTA could soon be Canada's most expensive housing market

The brokerage expected Calgary to see the biggest increase in home values ​​this year, but Toronto has since moved to the top of the list, followed by Montreal, where home prices are forecast to rise 8.5 percent year-over-year for the fourth consecutive year. Quarter 2024.

“While property values ​​declined in most markets across the country last year, Calgary's real estate market bucked that trend and continued to record home price gains. While activity levels are strong in Alberta and prices continue to rise, our research shows that buyer demand for available inventory is strongest in the country's two largest urban centers. We expect Toronto and Montreal to see the highest home price growth this year,” added Soper.

Rising prices in Toronto, Royal LePage said, could “close the gap” between Canada's two most expensive real estate markets.

“While Vancouver remains the nation's most expensive market today, Royal LePage predicts that aggregate home prices in the GTA will overtake Greater Vancouver in the second half of 2024,” the report said.

“Quickly moving from a buyer's market”

Soper said the strong start to the year reflects a “typically busy spring market” leading to an “uncomfortably busy fall.”

“It's clear that we're rapidly moving away from a buyer's market to a seller-dominated environment,” Soper said.

He stressed that interest rate cuts would not be the “main driver” of house price growth.

“While real estate boards across the country are reporting an uptick in listings, it's typical as we head into the spring market rush, with nearly every region from coast to coast experiencing a chronic shortage of housing,” Soper said.

“While we expect lower interest rates to draw more buyers back into the ring, that won't be the main driver of home price growth — a housing shortage in both small and large markets across nearly every part of the country. the main culprit.”