GTA home prices jumped in the last quarter of 2023 compared to the previous year, report finds
GTA home prices climbed 5.1 per cent in the final quarter of 2023 compared with the same period the year before, a new report released by Royal LePage shows.
The firm’s fourth-quarter home price survey says the aggregate price for a house in the GTA increased to $1.123 million year-over-year, but fell 2.1 per cent on a quarterly basis. Nationally, the home price jumped 4.3 per cent year-over-year and dropped 1.7 per cent quarterly.
The report said the numbers highlight that “elevated borrowing costs continue to affect market activity, as Canadians adapt to the higher interest rate environment.”
Looking ahead, Royal LePage expects the market to pick up before rate cuts, as soon as homeowners feel confident that the homes they buy won’t be worth less in the future. With inflation sitting at 3.1 per cent, some economists forecast that the Bank of Canada will gradually cut interest rates this year.
The narrative suggesting the housing market will rebound only after rates are lowered “misses the mark,” said Royal LePage President and CEO Phil Soper. “It has more to do with their worries about dropping home prices than interest rates themselves,” he said.
Soper expects the prices to stabilize in the first quarter in 2024 due to pent-up demand from sidelined buyers and newcomers, and sky-high rent prices attracting investors to the market. “As soon as people see that home prices have stabilized or are appreciating again, a proportion of the market that has been sitting on the sidelines will begin to trade again.”
Royal LePage’s 2024 outlook predicts Toronto home prices will rise six per cent by the end of this year and national home prices will increase 5.5 per cent.
The firm’s latest report released Monday breaks down the numbers by housing type, with the median price of a single-family detached home in the GTA climbing 3.6 per cent year-over-year to $1.373 million in the final quarter of 2023.
The price of a condominium jumped 5.4 per cent to nearly $720,000 during the same period. By contrast, the median price of a condominium in Toronto’s core went up 2.7 per cent to about $700,000.
“For the first time in months, Canadians seem to be feeling somewhat optimistic about the trajectory of borrowing costs,” Karen Yolevski, chief operating officer at Royal LePage, said in the report. She said a “brisk” spring real estate market looms for the GTA, provided the bank ends its aggressive campaign of rate hikes.
Yolevski said that despite a recent boost in supply across the GTA, housing stock cannot keep pace with the growing demand, driven by a record-high number of newcomers entering Canada, older generations wanting to age in place and new household formation.
There’s no easy fix to that imbalance, she warned. “There is no silver bullet to solving Toronto’s – nor Canada’s – housing supply and affordability crisis.” Instead, Yolevski said a series of initiatives to support and incentivize a rapid increase in housing supply is needed from all government levels.
This article was reported by The Star
