GTA home prices expected to overtake Vancouver in 2024

Toronto may soon become the most expensive place to buy a home in Canada.

That's according to Royal LePage's home price update and market forecast released Thursday.

The updated forecast projects aggregate GTA home price growth of 10 percent by the end of 2024, up from the original forecast of six percent at the start of the year after a “stronger-than-expected” first quarter.

As a result, Royal LePage now predicts that Toronto's aggregate home prices will surpass Greater Vancouver's in the second half of the year.

Warm winter weather and expectations of lower interest rates from the Bank of Canada “prompted some buyers who were put off last year to re-enter the market with renewed purpose,” Royal LePage COO Karen Jolewski said in a report. This means that competition will increase while the supply of housing in Toronto remains too low.

According to Royal LePage, GTA prices are expected to increase more than any other jurisdiction this year, followed by a projected eight percent increase in Montreal.

The updated forecast comes after a report by brokerage Zoocasa reported that Toronto's average housing cost is higher than New York's, despite higher median incomes for New Yorkers.

In the first quarter of 2024, GTA aggregate home prices rose 5.2 percent to $1,177,700. They are projected to rise to $1,235,630 by the end of 2024. Royal LePage calculates the aggregate price using a weighted average of the median values ​​of all housing types collected.

Home prices are rising in Canada

Nationally, Royal LePage projects annual aggregate home price growth to be nine percent, up from the 5.5 percent increase initially projected.

“It is clear that we are rapidly moving away from a buyer's market to a seller-dominated environment,” said Phil Soper, president and CEO of Royal LePage.

Royal LePage's report cites high demand, low supply and an influx of new Canadians as the main drivers of projected national growth, as well as potential buyers acknowledging that mortgage rates aren't going down anytime soon.

“The market hit a critical tipping point in the first quarter of 2024, when home prices started to fall and start to rise again,” Soper said.

“It is clear that more buyers are being driven by the need to get ahead of rising house prices rather than adopting a strategy of waiting for mortgage rates to fall.”

John Pasalis, president of real estate brokerage Realosophy, says the main driver of rising prices is population outpacing housing development.

“We're basically catching up,” he said in an interview.

Ottawa, Bank of Canada will consider accessibility

Some efforts have been made at the federal level to lower housing prices across the country.

The federal government recently announced that Work to reduce the number of temporary residents in Canada From 6.2 percent to five percent by 2027. And the Bank of Canada has been keeping interest rates constant for several months, the head of the bank said. rates may start to drop at the beginning of the season.

Deputy Prime Minister and Finance Minister Chrystia Freeland announced other affordability measures this week.

First-time home buyers can now put more of their RRSP into a home deposit and have another three years to get the money back. In addition, first-time homeowners will soon have 30 years to pay off their insured mortgages.

Prime Minister Justin Trudeau published today the federal government is leasing public land to accelerate the pace of housing construction with a goal of building 3.9 million homes by 2031.