June 2024 Home Sales Update in GTA

Market Insights June 2024 home sales in the Greater Toronto Area (GTA) saw a decline compared to last year, despite a rate cut by the Bank of Canada. Many buyers are waiting for more significant rate cuts before making their move, resulting in a slight drop in average selling prices. Key Highlights: 📉 Home sales: 6,213 (down 16.4% from June 2023) 🏠 New listings: 17,964 (up 12.3% year-over-year) 💲 Average selling price: $1,162,167 (down 1.6% from June 2023) 📊 MLS® HPI Composite benchmark: down 4.6% year-over-year Market Trends: "Recent rate cuts have provided some relief, but more cuts are needed to significantly boost home sales," says TRREB President Jennifer Pearce. Despite high interest rates, long-term demand remains strong due to population growth. Opportunities: With a well-supplied market, buyers have substantial negotiating power. Elevated inventory levels will help keep prices stable as sales pick up with lower borrowing costs. Expert Guidance: Planning to buy or sell? Contact Ali Bolourchi and his team for expert advice on navigating the current real estate market. #TorontoRealEstate #GTAHomes #MarketUpdate #AliBolourchi #RealEstateExpert #HomeSales #June2024

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Supply and Demand: Population Growth Snapshots and Insights

There has been a lot of attention on Canada’s population growth recently; in a May 2024 Edge Realty Analytics report, there are some insights on potential future growth, as well as the future of supply and demand in real estate. Metro Population Growth StatsThe metro-level population data for 2023 showed a national growth rate of 3%, but with significant regional variations.Seven major metropolitan areas experienced an unprecedented population growth exceeding 4%. It should be noted that housing stock has historically never increased at a comparable rate.In particular, Calgary and Edmonton saw growth rates of 6% and 4.2%, respectively, which is helping lead the robust housing market in Alberta. However, Saskatchewan is also of interest. With low supply growth and strong population increases, it may present compelling long-term real estate opportunities. Both Saskatoon and Regina experienced growth above 4% last year. Kitchener led with a 6.1% growth rate, largely due to a substantial increase in international students at Conestoga College, which led the country in international student growth, having expanded enrollment by 12,000 individuals or 1,579% since 2015. However, this trend of growth due to international students is unlikely to continue. Ontario is facing a 60% reduction in study permit issuance for the 2024 school year, likely bringing Kitchener’s growth back in line with national averages.Source: Edge Realty AnalyticsSource: Edge Realty AnalyticsConcerns of Population SurgesThe Edge Report further notes that, although concerns about population surges due to immigration, some projections of these surges are based on estimates and linear extrapolations, and may be slightly misleading when considering growth. Permanent resident growth has remained stable over the past couple of years, with PR admissions even decreasing by 15% year-over-year in March 2024. The acceleration in growth has been coming from the non-permanent resident sector. To sustain this upward trend, continued acceleration in non-permanent residents beyond the 800,000 annual rate observed last quarter would be necessary. However, this rate is unlikely given the federal government’s active efforts to curtail it.Source: Edge Realty AnalyticsFurthermore, although international student admissions surged in Q1 by 51% year-over-year in March, these figures reflect visas approved before the federal government announced a substantial 35% reduction in permits for 2024. When examining new applications, they declined by 15% year-over-year in Q1 and dropped by a significant 53% year-over-year in March alone. Student applications from India, the leading country of origin for international students dropped by 85% year-over-year in March, reaching their lowest levels since the global lockdown in 2020. As a result, population growth from international students is likely to drop. Source: Edge Realty AnalyticsSource: Edge Realty AnalyticsAdditionally, temporary worker admissions are also likely to drop. As noted on Indeed Canada, with economic and policy changes, foreign job seekers seem to be losing interest in jobs in Canada. Clicks on Canadian job postings on Indeed from outside of Canada dropped from an average of 14.4% in Q3 2023 to 8.6% in March 2024. With weaker job markets, in addition to the federal government’s announcement of its intention to reduce the number of non-permanent residents by 600,000 over the next three years, this trend is likely to continue. Building PermitsOn the supply side, a critical other aspect for housing, the number of building permits issued in March fell by 4% month-over-month on a seasonally adjusted basis, including a 7% decline in the single-family segment. Even if demand starts to wane with reduced immigration, it is likely a significant supply shortage is developing, particularly in Ontario and British Columbia.

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GTA REALTORS® Release May 2024 Stats

  📢 TORONTO, ONTARIO, June 5, 2024 – May home sales continued at low levels, especially in comparison to last spring’s short-lived pick-up in market activity. Home buyers are still waiting for relief on the mortgage rate front. Existing homeowners are anticipating an uptick in demand, as evidenced by a year-over-year increase in new listings. With more choice compared to a year ago, buyers benefited from more negotiating room on prices. "Recent polling from Ipsos indicates that home buyers are waiting for clear signs of declining mortgage rates. As borrowing costs decrease over the next 18 months, more buyers are expected to enter the market, including many first-time buyers. This will open up much-needed space in a relatively tight rental market," stated Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce. 📊 Greater Toronto Area REALTORS® reported 7,013 home sales through TRREB’s MLS® System in May 2024 – a 21.7 per cent decline compared to 8,960 sales reported in May 2023. New listings entered into the MLS® System amounted to 18,612 – up by 21.1 per cent year-over-year. 📉 The MLS® Home Price Index Composite benchmark was down by 3.5 per cent on a year-over-year basis in May 2024. The average selling price of $1,165,691 was down by 2.5 per cent over the May 2023 result of $1,195,409. On a seasonally adjusted monthly basis, the average selling price edged up slightly compared to April 2024. 📈 “While interest rates remained high in May, home buyers did continue to benefit from slightly lower selling prices compared to last year. We have seen selling prices adjust to mitigate the impact of higher mortgage rates. Affordability is expected to improve further as borrowing costs trend lower. However, as demand picks up, we will likely see renewed upward pressure on home prices as competition between buyers increases,” said TRREB Chief Market Analyst Jason Mercer. 🏘️ “In order to have an affordable and livable region over the long term, we need to see a coordinated effort from all levels of government to alleviate our current housing deficit and to provide housing for new population moving forward. On top of this, governments need to ensure the delivery of infrastructure to support our growing population. The economic health and liveability of our region depends on the timely completion of public transit projects including better transparency and clear timelines on the completion of the Eglinton Crosstown LRT,” said TRREB CEO John DiMichele.  

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