Things are looking up in 2024
Stabilizing interest rates and buoyed consumer confidence will bring about a return to a more balanced market.
Whether the start of a new year prompts you to join a gym, haul out the vision board supplies, or it’s merely a blip on your radar, it does tend to inspire reflection – reflection about what has transpired in the year that’s gone by, and what may be in store in the one to come. As far as the Toronto real estate market is concerned, there is certainly a lot to reflect upon as the past year has been one marked by change. This is clearly reflected in the TRREBstats that were recently released, looking back at both the month of December, as well as the 2023 year-end.
A BANNER YEAR FOR HEAPS ESTRIN
Perhaps the most notable statistic was the total number of transactions for the year, which sat below 70,000. This represents a 12 per cent dip compared with the previous year, and the lowest number of transactions for the GTA in more than 20 years. Despite the inauspicious figures and the seemingly tumultuous market, the Heaps Estrin Team managed to achieve the best year ever for the brokerage. This atypical result can very likely be attributed to the same factors that caused the shifts in the market in the first place: higher borrowing costs, declining prices, and federal requirements around mortgage qualifications, for example, all of which led to a dip in consumer confidence. And when consumer confidence is under stress, buyers and sellers will often opt to entrust their transactions to the highest calibre of experts, with a solid record of success and a history of navigating every iteration of the real estate market. It is a wise business decision and one that paid off handsomely for our 425+ happy clients this year. We remain forever grateful for that unwavering trust, especially in uncertain times.
As for Central Toronto, the number of transactions was in fact higher across all categories in December 2023, compared to the same time last year, with an average increase of 11% overall in the total number of transactions, bucking the trends seen elsewhere. Most categories did experience a modest dip in pricing and many listings spent more time on the market, but semi-detached inventory in the area experienced a slight increase in price (1%) and transactions were up by a staggering 87%. So, while days on the market increased, and there were fewer multiple-offer scenarios, Central Toronto remained relatively strong in comparison to many of its GTA counterparts.
A MATTER OF INTEREST
Of course, a fundamental contributor to the changes that the market underwent in the last year was the ascending interest rate. The Bank of Canada’s announcements have been the subject of countless water cooler discussions and likely some sleepless nights. However, the end of 2023 brought with it a pause to those increases and that trend is expected to continue into 2024 with minimal hikes anticipated; in fact, we may see some cuts to the prime lending rate instead.
The bottom line is that we can expect to see a more balanced market return to the city and there is cause to be optimistic about what lies ahead for Central Toronto in particular. Recent corrections, stabilizing interest rates, and an increase in consumer confidence will motivate those who may have postponed real estate decisions to re-enter the market. And, in Toronto where a lack of inventory and high immigration have historically made this market a very strong one, we are poised to bounce back even faster than other markets across the country.
If you have questions about your neighbourhood, the market, or what to expect in 2024 and how to strategize accordingly, we are here to help.