REXIG SUMMARY Housing Market Insights: Anticipated Relief in the GTA Housing Market
In November 2023, the Greater Toronto Area real estate market confronted substantial challenges, experiencing a notable six percent downturn in home sales compared to the same period last year. This decrease was primarily attributed to the burdensome combination of high borrowing costs and economic uncertainty. Nevertheless, a surge in listings emerged as a silver lining, broadening choices for buyers and contributing to the stability of flat year-over-year selling prices. // Amidst growing affordability concerns fueled by inflation and heightened borrowing costs, particularly impacting the interest rate-sensitive housing market, there is optimism for relief on the horizon. Industry experts point to anticipated Bank of Canada rate cuts in the first half of 2024, coupled with a simultaneous decline in bond yields. This dual movement positions lower rates to effectively address challenges faced by both existing homeowners and potential buyers. Notably, home prices adjusted in response to elevated borrowing costs, providing a tangible measure of relief for buyers from an affordability standpoint. // Looking ahead, there is anticipation of a potential surge in demand relative to supply as mortgage rates trend lower in the coming year, coupled with sustained population growth. This optimistic outlook could pave the way for renewed growth in home prices. Stakeholders underscored the imperative for proactive policy decisions addressing housing affordability, including strategic measures to augment the housing supply.
REGIONAL SPOTLIGHT // NOVEMBER 2023 Mississauga Real Estate Market Report
Mississauga's housing market experienced a significant transformation in November 2023, marked by a notable 10% decrease in average home prices within the month. The broader real estate market, including both Mississauga and the Greater Toronto Area, transitioned from a buyer's to a balanced market, where inventory remains relatively high but less favourable to buyers than in a buyer's market.
The rapid change in Mississauga's housing landscape was highlighted by the staggering drop in average home prices, falling over $110,000 from $1,106,263 in October 2023 to $993,352 in November 2023. This decline pushed the city's average home price below $1 million, a situation not observed since January 2023. Strikingly, Mississauga's average home price is now even lower than Brampton's, standing at $1,002,482 in November 2023. Despite the dramatic month-to-month variation, the year-over-year data reveals a more moderate 3% decrease, reflecting the overall stability of the GTA housing market.
While the remarkable dip in home prices compared to the previous month captures attention, the year-over-year figures underscore a relative steadiness in the market. With a 3% decrease aligning closely with the GTA housing market's overall stability, the recent market dynamics suggest a balance between buyer and seller influences, contributing to Mississauga's evolving real estate landscape.
Looking ahead, Mississauga's housing market is poised for continued adjustments, with the recent shift to a balanced market signaling a more neutral ground for both buyers and sellers. As economic conditions and housing demand evolve, future trends will likely reflect a recalibration of prices and inventory levels, fostering a market landscape shaped by ongoing equilibrium.
ECONOMIC SPOTLIGHT Bank of Canada Remains on Hold // Q4 2023
The Bank of Canada has decided to maintain the overnight rate at 5%, continuing its recent trend of forgoing rate hikes. The BoC's statement indicates a cautious stance, emphasizing weak economic data that suggests a moderation in spending and a reduction in inflation pressures.
Key economic indicators include a surprising 1.1% contraction in Q3 GDP, below previous projections. Labour market conditions are also acknowledged, with unemployment in Canada steadily rising. While the BoC's preferred inflation measures remain above target, there's a noted improvement, reflecting reduced pressure across consumer prices.
Wage growth remains at 4-5% year-over-year, but continuous softening in labour demand suggests potential challenges. The BoC sees the Canadian economy as "no longer in excess demand," indicating softer economic conditions and paving the way for a return to the 2% inflation target.
Looking forward, Governor Macklem suggests that interest rates are likely restrictive enough, anticipating more downward pressure on inflation. Inflationary risks are diminishing, aligning with downside growth risks. Soft trends in consumer spending and labour market data are expected into early 2024, with potential rate cuts in the second half of the year based on economic developments.
Source – RBC 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.