2024 - Year in Review

The GTA Real Estate Market entered 2024 without a lot of optimism. Sales in the back half of 2023 were dismal and prices had been trending lower. There wasn't really any indication that inflation was fully under control. The one saving grace? Inventory was still relatively low with apx. 10,000 listings heading into 2024. Apparently that coupled with better inflation data was enough to spur the market. January saw a 5% drop but numbers don't tell the whole story. Showing and buying activity was picking up, listings that hadn't sold were starting to move and overall sentiment was much improved relative to the back half of 2023. From February to May, prices increased 13%. And all of a sudden the market was back! And then it wasn't...Inventory had been steadily building and by May we had more than 18,500 listings. The first rate cut in June didn't help. If anything, with every rate cut in the summer we saw more listings come out. The summer was slow and the market had a bit of an uptick in October/November but ended the year with activity in line with the slower holiday season. Overall prices ended in the year at $1.067M which was a $17K decrease from where we ended 2023 (-1.5%). All in all, a relatively flat year.

Taking a step back, Real Estate continues to be an amazing investment with a huge caveat. You have to invest for the long-term. Looking at the past 10 years, prices have almost doubled from $567K to $1.118M!

Another interesting fact is that average sales over the past 10 years has been around 90K. The last 3 years have been well BELOW that average (67-75K). Is this alarming given that population has increased so much over the past 10 years? To me it actually highlights that while demand has been suppressed, prices have remained sticky and this bodes well for when demand returns to the 10 year average.

Other notable news in 2024:

• Starting in June, the Bank of Canada cut 5 straight times for a total of 1.75%. Variable rates are now hovering around 4.5%
• Fixed rates started the year at close to 5% and are now hovering in the low 4% range
• Inflation seems like it is under control (2% or less since August)
• Government continues to intervene to help housing (first time home buyer programs, increases to purchase price of insured purchases (less than 80% loan to value) to allow for lower down payments
• Capital gain inclusion rate increased from 50% to 66.67% (although this still hasn't passed, it appears the CRA is still collecting for some reason)

How did the year end? Many expected the market to end 2024 (Dec) a bit stronger after a bounce in October and November. However, we did see inventory come off the market, either through terminations or homes selling. I would chalk this up to the holidays and December being a slower time of year. Active inventory now sits at apx. 15,400 which is MUCH lower than the peak of this year (apx. 10K higher). With that being said, we are still starting out the year with more inventory than last year but it seems buyers have come out quite active to start 2025. I'll be posting my thoughts on why prices could go up or come down in 2025! Stay tuned!