REXIG SUMMARY Housing Market Insights: Shifts in Demand & Affordability
In December 2023, the Toronto housing market experienced a significant shift, with a heightened demand for rental properties driven by record immigration levels. However, the number of home sales in the Greater Toronto Area dropped to under 70,000, primarily due to affordability challenges exacerbated by high mortgage rates. This trend was a reflection of the broader issues of high borrowing costs and stringent mortgage qualifications, making home ownership tight for many potential buyers. // The year saw 65,982 home sales, a 12.1 percent decrease from 2022. The average selling price for homes was $1,126,604, down by 5.4 percent from the previous year. These figures underscore the trend of a decade-long flat-to-down trajectory in new listings, raising concerns in the face of a continuously growing population. Despite these challenges, buyers in 2023 had more options and were able to negotiate lower selling prices, alleviating some of the impacts of the high borrowing costs. // Looking forward, there is an anticipation of a rebound in the housing market with expected lower borrowing costs and a resilient economy. TRREB officials emphasize the need for an increase in housing availability, both for rent and purchase, to accommodate the projected rise in immigration and ensure the provision of affordable housing. This approach is deemed crucial for maintaining housing stability and supporting future growth in the GTA region.
REGIONAL SPOTLIGHT // DECEMBER 2023 Oakville Real Estate Market ReportÂ
In December 2023, the Oakville-Milton area's real estate market showed mixed signals. Home sales saw a 10.6% increase from December 2022, with 146 homes sold, but these figures were still below the five and ten-year December averages. Overall, 2023 experienced a significant 12% drop in annual home sales compared to 2022, reaching the lowest annual total in over two decades. Despite this, December ended on a high note with increased buying activity, though it's unclear whether this indicates a market recovery or a temporary buying rush.
The MLS® Home Price Index composite benchmark price stood at $1,223,500 in December 2023, a decrease of 3.4% compared to the previous year. The benchmark prices for different types of homes varied, with single-family homes seeing a 2.8% decline, while townhouse/row units and apartments experienced modest increases.
The average sale price in December 2023 was significantly higher than in December 2022, at $1,528,631, an 18.7% increase. However, the comprehensive annual average price for 2023 was $1,431,687, showing a 3.8% decline from 2022.Â
New listings in December were the lowest for the month in over 15 years, down by 12.9% from December 2022, and active residential listings were 17.1% higher than at the end of December 2022, the highest in five years for the month. The months of inventory, which indicates how long it would take to sell current inventories at the current rate of sales activity, were slightly up at 2.7 months.Â
Market Outlook
As we move into 2024, the Oakville-Milton real estate market is at an important turning point. With an increase in active listings and a higher inventory duration, combined with fluctuating home price trends, the market is evidently navigating through a period of adjustment. In light of these evolving dynamics, it's important for potential buyers and sellers in the Oakville-Milton area to remain well-informed and adaptable to the changing market trends.
ECONOMIC SPOTLIGHT Bank of Canada Remains on Hold // Q4 2023
The Canadian economy stands at a pivotal moment, with a notable slowdown driven by higher interest rates implemented to manage inflation. This economic downturn has prompted the Bank of Canada to consider reducing rates as early as spring, a strategic move to counteract the sluggish economic growth. The downturn is evident in contrast between the 3.8% growth rate in 2022 and the much slower pace of 1.1% in 2023.
This challenging economic environment is characterized by decreased consumer spending and a decline in business investments. The Bank of Canada's policy decisions in the coming months, particularly the expected rate cuts, are critical for stimulating the economy and fostering a recovery. However, the path to economic revival is expected to be slow and steady, with real GDP growth projected to improve only modestly to 1.5% by 2025.
As Canada navigates this crucial period, the economy faces a delicate balance. On one hand, there's a need to stimulate growth and boost consumer confidence; on the other, it's important to maintain a cautious approach to avoid overheating the economy or reigniting inflationary pressures. The Bank of Canada's policy maneuvers, therefore, will be instrumental in shaping the country's economic trajectory, aiming to steer the economy towards a more balanced and sustainable path of growth amidst ongoing global and domestic economic headwinds.
Source – TD Economics*
As valued clients of REXIG Realty, we are excited to provide you with our latest Real Estate Market Report for the Greater Toronto Area & surrounding regions such as Niagara, Kitchener and Waterloo.
Our goal is to keep you informed and empowered with the most up-to-date information to make informed decisions regarding your real estate investments.