Toronto home sales rose in January

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Toronto's benchmark home prices fell for the seventh straight month in January, but a year-over-year increase in home sales prompted the region's real estate board to warn that prices may not remain sluggish for long.

Overall, 4,223 sales were recorded through the Toronto Regional Board of Real Estate MLS for the month, a 37 percent increase from January 2023. Meanwhile, the benchmark home price fell by less than one percent month-over-month to $1,065,800. the downward trend began in June 2023, when the benchmark was $1,171,300.

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The TRREB hailed the figures released on February 6 as a “positive start” to the year, saying that the decline in home prices may not be sustained if sales continue to strengthen.

“As a result, tighter market conditions compared to a year ago may point to new price increases as we move into the spring market,” the board said in a press release.

According to TRREB, the number of new listings also increased year-over-year, though at a modest rate of about six percent.

Toronto realtor Kayleigh Heaps said she believes the real estate market is changing.

“I think we're moving into a market where buyer and seller expectations are aligned, which we didn't see in 2023,” Heaps said. “I think with expectations coming in line, we're going to see an increase in inventories and modest or conservative price growth.”

Jason Mercer, TRREB's chief market analyst, predicts that the housing shortage will persist for the next few years, but that rate cut could boost activity in the second half of the year.

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“Once the Bank of Canada begins to effectively lower its policy rate, perhaps in the second half of 2024, expect home sales to pick up further,” Mercer said in the report. “Competition among buyers will intensify in 2024 as demand increases and listing supply remains constrained – the end result being upward pressure on selling prices over the next two years.”

While January's sales total was higher than last year, some didn't want to read too much into it, given that more than 6,900 sales were recorded in January 2021.

“We're not seeing a dramatic increase in transactions,” said John Lusink, president of real estate brokerage Right At Home Realty. “I'd say based on our own data for the At Home program, we're seeing 60 to 70 transactions a day. If we return to 2021, this number will approach 100.”

John DiMichele, CEO of TRREB, said lower borrowing costs are a positive factor on the horizon, but represent only one piece of the puzzle when it comes to improving housing market conditions.

“At the federal level, the Office of the Superintendent of Financial Institutions (OSFI) needs to give more thought to the mortgage stress test, particularly its application at different points in the interest rate cycle,” DiMichele said in the report.

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DiMichele said Ontario's top priority should be building 1.5 million new homes, but expressed concern over Toronto's move to raise property taxes, which he said would not effectively address the city's structural deficit.

The board, which serves more than 69,495 real estate brokers and salespeople in the Greater Toronto Area, reported the biggest benchmark price increases were in Caledon at 3.02 per cent, East Gwillimbury at 2.62 per cent and Bradford at 2.58 per cent.

Additionally, the largest benchmark price declines were recorded in Innisfil, Scugogue and Oakville at 4.66%, 3.97% and 2.78% respectively.

The lowest benchmark home price in January was $767,400 in Innisfil.

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