Overview: a look at how the GTA housing market performed in December 2023, with an analysis of sales, prices, and listings, advice for buyers and sellers, and predictions for 2024.
According to BNN Bloomberg, the latest figures suggest Toronto’s housing market may be in the midst of a rebound.
Sales are up, prices are up, and so is buyer and seller confidence.
What’s the reason for this turnaround?
Let’s find out by looking at the December 2023 data, including home sales, prices, inventory, and interest rates, and what they mean for buyers and sellers in 2024.
December 2023 GTA Housing Market Numbers
Here’s a year-over-year breakdown of the December 2023 numbers:
- GTA Home Prices: up 3.2% to $1,084,692
- Toronto Home Prices: up 4.4% at $1,062,914
- GTA Home Sales: up 11.5% to 3,444
- Toronto Home Sales: up 9.0% to 1,266
- New Listings: down 6.6% to 3,886
According to WOWA:
The Greater Toronto Area (GTA) housing market continues to hold steady, with an average home price of $1,084,692 for the month of December 2023… GTA home prices remain up 3%, showing that the market remains resilient.
The words “steady” and “resilient” show the strength of the GTA housing market, even with interest rates at historic highs.
Interestingly, new listings were down 6.6% after surging 16.5% in November, 38.0% in October, and 44.1% in September, suggesting sellers are reluctant to list.
The month-over-month numbers provide further insight.
From November to December, home prices were up 0.2% (or $2,513).
Meanwhile, home sales plunged 20.6% during the same period.
In fact, according to CBC News:
The number of home sales in the Greater Toronto Area in 2023 is on track to be lower than in any year since 2001…
How could sales fall to multi-decade lows but prices keep rising?
The answer is a combination of high interest rates and buyers still waiting for prices to drop further, which resulted in slow sales but prices holding steady.
December 2023 Home Prices By Property Type
Here’s a year-over-over breakdown of GTA prices by property type:
- Detached Houses: up 2.5% to $1,418,323
- Semi-Detached Houses: up 1.7% to $1,027,432
- Townhouses: up 5.5% to $912,403
- Condos: down 3.1% to $682,525
WOWA informs:
The average price of a detached home in the GTA was $1,418,323 in December 2023, a 2% increase year-over-year. Semi-detached home prices also increased 2% year-over-year to an average price of $1,027,432.
Townhouses posted the biggest price gain, up an impressive 5.5% to $912,403.
Meanwhile, condos were the only property to see an annual price decrease, falling 3% to $682,525.
It was a similar story when it came to sales.
Compared to last December, detached home sales rose by 13.6%, townhouses by 19.8%, and semi-detached homes by a whopping 36.7%.
Once again, condos were the only property to post a sales drop, sinking 1.4%.
Despite the decrease, condo sales were still higher than all other properties combined.
In other words: condominiums were the most popular property among buyers, most likely due to their affordability.
Speaking of which, condos are back below the $700,000 threshold for the first time since January 2023.
And with prices falling, condos will continue to attract new buyers in 2024.
2023 Recap & 2024 Forecast
blogTO puts it bluntly:
2023 [has] the most dismal sales data on record since 2000.
There were about 66,000 home sales in all of 2023, down 12% from 2022 and 46% from 2021.
Prices also fell 5.4% to $1,126,604, and there was less inventory than the year before.
All in all, 2023 was painful for both buyers and sellers.
So will 2024 be any better?
The answer is yes.
According to BNN Bloomberg:
[The] prevalence of higher interest rates throughout 2023 made it an unusually slow year for Toronto’s housing market.
However, most experts agree that interest rates will start coming down this year.
For example, Deloitte predicts rate cuts could come as early as spring (i.e. March)!
While Deloitte forecasts a 75 basis point cut, banks like TD and CIBC expect rates to drop 150 basis points by the end of the year.
A rate cut would mark a turning point in the GTA housing market, spurring excitement and activity.
More buyers will be able to qualify for a mortgage, leading to more competition, more sellers, and higher prices.
In fact, some experts predict GTA home prices to rise by 6% this year.
Advice For Home Sellers
As interest rates drop, prices and competition will only rise.
In fact, mortgage rates are already on their way down.
According to BNN Bloomberg:
Royal Bank of Canada, the country’s largest lender, is again posting five-year, fixed-rate mortgages below 6%.
With interest rates poised to come down, fewer listings on the market, and rising sales, sellers are in a position of power.
WOWA informs:
The GTA housing market has transitioned from being in a buyer’s market territory, emerging into a balanced market in November before heading deep into seller’s market territory in December 2023.
December had a sales-to-new-listings ratio (SNLR) of 89%, more than double November’s SNLR of 40%.
An SNLR below 40 is considered a buyer’s market, and above 60 is a seller’s market.
So December’s SNLR of 89% puts the GTA in a deep seller’s market—a complete reversal of the deep buyer’s market from September.
How does that help sellers?
Bankrate.com has the answer:
Home prices tend to go up in these conditions, as buyers compete for the few options that are available, and sellers are less likely to make concessions because they may receive multiple offers. Also, homes tend to stay on the market for a shorter amount of time…
Sellers who list now can expect more competition, quicker sales, and higher prices.
Where does all this leave buyers?
Advice For Home Buyers
First, interest rates are expected to fall.
As that happens, passing the mortgage stress test will become easier and more buyers will be able to afford homes.
Price is perhaps the most important factor when deciding whether or not to buy a home, and the good news is that prices are down big.
Better Dwelling reports:
Last month marked the sixth consecutive decline for the price of a typical home. Prices are now 19.3% (-$254.8k) lower than the all time high reached in March 2022…
So prices have been trending down month-over-month for half a year, and are almost 20% off the all-time record.
Inventory also remains higher than usual, with active listings jumping 19.3% and offering more choice.
Buyers still have a lot of negotiating power on their side.
As blogTO reveals:
…buyers are underbidding homes more than they have in the last decade, leading the more desperate sellers to let go of their homes for less than they’d hoped.
Homes are also taking longer to sell, sitting on the market for an average of 32 days compared to just 8 days in March 2022.
That means buyers can avoid the rush and take their time to find a home they love.
Lower prices, robust inventory, negotiating power and interest rate cuts—these are just some of the reasons for buyers to remain hopeful in 2024.
December 2023 Market Report Conclusion
According to The Globe and Mail:
The GTA real estate market did end 2023 on an up note, with home sales jumping 21.3 per cent in December compared with November on a seasonally adjusted basis.
This was thanks to a dip in mortgage rates, and when the BoC finally starts cutting rates in the coming months, it will reenergize the housing market.
Sellers can look forward to more competition, fewer concessions, quicker sales, and higher prices.
Conversely, buyers can expect an easier stress test, more affordable home loans, and prices far below all-time highs.
Want to know more about the housing market? Contact me below for answers.
Wins Lai
Real Estate Broker
Living Realty Inc., Brokerage
m: 416.903.7032 p: 416.975.9889
f: 416.975.0220
a: 7 Hayden Street Toronto, M4Y 2P2
w: www.winslai.com e: [email protected]
*Top Producer (Yonge and Bloor Branch) — 2017-2023