Toronto housing market gains as buyers return from the sidelines

Regional real estate board reports sales and prices increased in February

Toronto housing market gains as buyers return from the sidelines
Steve Randall

Homeowners and residential real estate investors in the Greater Toronto Area will be buoyed by new stats showing an improvement in the market last month.

The monthly report from the Toronto Regional Real Estate Board published today (March 5) reveals that buyers have returned to the market with sales up in monthly and annual terms, and prices also heading upwards following a drag on the market highlighted in the national HPI in January.

TREBB says that there were 5,607 home sales through its MLS in February, up almost 18% year-over-year (12.3% when factoring in the leap year effect). Sales were lower though on a seasonally adjusted basis following two consecutive monthly gains.

Prices edged higher with a 0.4% rise in the MLS Home Price Index Composite benchmark, while the average selling price was up 1.1% to $1,108,720, with an increase on a seasonally adjusted basis too.

TREBB president Jennifer Pearce said that after a prolonged period of elevated interest rates, homebuyers are now anticipating that the BoC will start cutting.

“A growing number of homebuyers have also come to terms with elevated mortgage rates over the past two years,” she said. “To minimize higher monthly payments, some buyers have likely saved up a larger down payment, chosen to purchase a less-expensive home type and/or looked to a different location in the GTA.”

Upward trend?

With strong population growth added into the mix, TRREB chief market analyst Jason Mercer is expecting the market to continue to gain.

“As we move through 2024, an increasing number of buyers will re-enter the market with adjusted housing preferences to account for higher borrowing costs,” he said. “In the second half of the year, lower interest rates will further boost demand for ownership housing. First-time buying activity will also be a contributing factor, as many renters look to trade high monthly rents for a long-term investment in which they can live and build equity.”

Despite challenges for the mass market, a report earlier this year showed that the Toronto ultra-luxury housing market was flourishing in 2023 including 31 homes that sold for more than $8 million.