Toronto homebuyers should expect slightly more inventory, higher prices this year: TRREB

Homebuyers can expect slightly more inventory and higher prices this year, according to Toronto Regional Real Estate Board’s latest forecast.

GTA home sales are expected to reach 77,000, up from about 65,000 in 2023 but still out of line with the 10-year average of 92,000.

The average selling price will tick up to $1.17 million, the second-highest mark on record but below 2022’s peak of $1.19 million, the board predicts.

“This will be the start of a multi-year recovery,” said Jason Mercer, the real estate board’s chief market analyst. “People are very interest-rate centric right now. Affordability remains an issue so even with lower borrowing costs we don’t foresee us moving back to the record pace we saw in 2021 (121,712 sales).”

An Ipsos survey completed for TRREB confirmed high borrowing costs are still a turnoff for many potential homebuyers.

 

 

 

Of more than 3,500 homebuyers surveyed between October and December last year, many said mortgage rates need to decline substantially for them to consider entering the market.

The lack of listings this year is not expected to improve as the survey revealed the number of homeowners likely to list their home for sale in 2024 fell two percentage points to 37 per cent.

The number of homes expected to sell this year echoes numbers last seen in 2018 and the 2008 recession.

Nearly a quarter of survey respondents told Ipsos they were selling their homes to move to a larger home while 14 per cent said they were forced to sell because they could not afford to pay expenses and taxes on the property.

Borrowing costs are likely to decrease this year, as the Bank of Canada is expected to start unwinding its earlier interest rate hikes, prompting sidelined buyers back into the market.

Lower rates will also reduce the chance of default for homeowners renewing low-rate mortgages in the next few years.

 

 

This article was reported by The Star