REXIG SUMMARY
Rising Opportunities in GTA's Real Estate Market
The Toronto real estate market in May 2024 reflects a period of continued caution among homebuyers, influenced largely by high mortgage rates and economic uncertainty. With a significant decline in sales compared to the previous year, the market dynamics offer a clear view of current buyer reticence. However, an increase in new listings suggests a silver lining, providing prospective buyers with more choices and potentially better deals. This report delves into the market performance for May 2024, offering insights into sales trends, price movements, and future market predictions.
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During May 2024, the Toronto Regional Real Estate Board reported a substantial 21.7% decrease in home sales compared to May 2023, signaling a stark reduction in market activity. Nonetheless, the influx of 18,612 new listings, a 21.1% increase year-over-year, suggests that sellers are either anticipating an uptick in demand or adjusting to the market's new norms. Despite the decrease in the overall price index by 3.5%, the slight month-to-month increase in average selling prices indicates a gradual adjustment of the market to the prevailing economic conditions.
The modest recovery in prices from the previous month points to a stabilizing yet cautious market environment. Industry experts predict that the market will see more active participation from buyers, particularly first-time homeowners, as mortgage rates are expected to decline over the next 18 months. This anticipated change could help relieve the tension in the tight rental market and foster a more robust buying environment.
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As the Toronto real estate market navigates through a period marked by high interest rates and cautious spending by potential homebuyers, the role of governmental intervention becomes increasingly crucial. Strategic efforts to address the housing shortage and improve infrastructure, particularly public transit projects, are essential for enhancing the region's economic health and liveability. Looking forward, the market is poised for gradual improvement, contingent on the broader economic landscape and policy actions aimed at boosting housing affordability and availability. The coming months will be critical in determining the trajectory of the Toronto real estate market as it adjusts to these evolving challenges.
REGIONAL SPOTLIGHT // MAY 2024 Waterloo Region Real Estate Market Report
In May 2024, the Waterloo Region real estate market observed a significant reduction in activity, with 742 homes sold—a decline of 8.1% compared to the same month last year and a 20% fall from the average sales volume over the past decade for May. This trend indicates a cooling phase in the housing market across the region.
Sales analysis by property type shows diverse impacts across the board. Detached homes saw a slight decrease of 1.3%, while townhouse transactions decreased by 3.6%. The condominium market suffered the most, with a 34.4% drop in sales, reflecting a significant oversupply, particularly of smaller units which now greatly outnumber interested buyers. The average price for all residential properties experienced a marginal year-over-year decrease to $818,507, albeit with a slight rise from the previous month.
Market Outlook
As the market outlook for May concludes, Waterloo Region has seen a substantial rise in inventory levels, evidenced by a 95.8% increase in active listings year-over-year, culminating in 1,741 homes available by month's end. This has extended the supply to 3.1 months across all property types, with a notable extension to six months for condo apartments, clearly indicating a tilt towards a buyer's market. Furthermore, the lengthening of the average time to sell a property signals a slowdown, suggesting that both buyers and sellers may need to adjust their strategies in response to evolving market conditions.
Read here to read our economic update for last month.
ECONOMIC SPOTLIGHT
Bank of Canada Implements Interest Rate Reduction During Economic Revival // Q2 2024
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.