Toronto home prices set for drop
CLARRIE FEINSTEIN BUSINESS REPORTER
After a muted fall market, real estate sales and prices are expected to increase across Canada in 2024, but Ontario will remain a mixed bag, Re/Max says in its housing outlook report published Tuesday.
Toronto prices are forecast to drop by three per cent, and even further in Kitchener at eight per cent, while some cities such as Windsor will see a 7.5 per cent increase, Re/Max said.
Brokers and agents at Re/Max expect the national average home price to increase by 0.5 per cent, and 61 per cent of regions surveyed
anticipate unit sales to increase in 2024.
“It’s been a challenging year for Canadian homebuyers and sellers, who have been feeling the effects of a severe housing shortage and the high cost of living, but much like Canada’s housing market, Canadians have stayed resilient. Historically, real estate has given owners excellent returns and strong financial security — and that hasn’t changed,” said Christopher Alexander, president of Re/Max Canada.
“The slower market we’ve been experiencing across the country this fall could be an early indicator of an active 2024, as reflected in the modest price increase and sales outlook for next year, and the balancing of conditions in several regions across the country.”
Going into 2024, the high cost of living and elevated interest rates are causing potential homebuyers in Canada to find properties that include basement units, or other rentable spaces, to have tenants to help offset expensive monthly mortgage payments and utility bills, the report said.
Re/Max expects a more balanced market in the GTA in 2024, but still see it favouring buyers at certain points of the year. In October, the sales-to-new-listings ratio was 32 per cent — anything below 40 per cent is considered a buyers’ market. Market activity is dependent on whether the Bank of Canada decides to cut rates in mid-2024, which some economists have forecast.
“Bank of Canada certainly holds the keys in a variety of metrics,” Alexander said. “But there’s still a housing supply crisis in Canada with no real national housing strategy, and that will prevent prices from falling too far.”
Christopher added that buyers are waiting until the spring market to jump back in, which will see “a lot of activity again.” There will be a bottleneck of people that have been waiting on the sidelines for too long and can no longer delay buying a property, he said.
Toronto’s condo market will also bounce back, Christopher said, as it doesn’t have much further to fall.
“A bunch of developers have cancelled all types of projects and sooner or later inventory will be too tight and we’ll see upward pressure on prices again,” he said.
“The condo market took the brunt of its price correction in 2023, so there will be modest gains or it will be flat going into late spring next year.”
Kitchener’s eight per cent price decline is likely from the struggling tech industry, a primary job market in the region, which has seen significant layoffs over the last year with potentially more to come. That variable in the job market has been calculated into the region’s price forecast.
“While there’s great price declines in the region, overall in Ontario, there’s such strong demand for housing, and a chronic lack of supply, it will help offset any significant depreciation,” Alexander said. “The market will move into more balanced territory in 2024.”
Re/Max Canada president Christopher Alexander says in the spring there will be a bottleneck of people who can no longer delay buying a property
Toronto Star Newspapers Limited