Greater Toronto home sales rose 11.5% last month compared with December 2022 as the Toronto Regional Real Estate Board says it expects 2024 to bring a rebound in activity following a year plagued by unaffordability.
But last month’s 3,444 sales pushed the annual total of homes that changed hands to 65,982, a 12.1% decline compared with 2022, with many buyers sidelined last year due to high mortgage rates.
The average home price at the end of the year was $1,084,692, up 3.2% from December 2022.
Many potential buyers have remained cautious in recent months, said real estate agent Anne Marie Lorusso with Freeman Real Estate Ltd., noting “everybody’s nervous about interest rates.”
Lorusso said she closed a deal earlier this week for a home in Toronto’s popular Trinity Bellwoods area after it spent nearly two months on the market and attracted many calls.
“Three years ago, this house would have been gone in seven days and now it took 60 days,” she said.
“I think a lot of people were holding back to wait and see what’s going to happen.”
TRREB president Jennifer Pearce said that high borrowing costs coupled with unrealistic federal mortgage qualification standards left the home ownership market unaffordable for many people in 2023.
“With that said, relief seems to be on the horizon,” Pearce said in a press release.
“Borrowing costs are expected to trend lower in 2024. Lower mortgage rates coupled with a relatively resilient economy should see a rebound in home sales this year.”
Across the GTA, December sales rose on a yearly basis in all categories except for condo apartments, which saw a 1.4% decline. Semi-detached homes led the way for gains in the region, with a 36.7% increase in sales for the month, followed by townhouses at 19.8%.
In the City of Toronto, there were 1,266 sales last month, a 10.1% jump compared with the same time in 2022. Throughout the rest of the GTA, home sales rose 12.3% to 2,178.
While the market was faced with challenges in 2023, Lorusso said the city’s downtown area isn’t doing “so badly,” as long as sellers are willing to hold out for the right offer.
“It takes time,” she said.
“There’s still people that are buying, there’s still people that are looking for all the reasons that people buy: their life changes, you’re growing a family, or you’ve come into a little bit of money or you just want to move out of your condo into a house.”
New listings fell 6.6% to 3,886 in December compared with 4,161 during the same month a year earlier.
The board’s chief market analyst Jason Mercer said those who were able to participate in the market last year benefitted from more choice, allowing many of them to negotiate lower selling prices.
“Assuming borrowing costs trend lower this year, look for tighter market conditions to prompt renewed price growth in the months ahead,” he said.