The February 2024 Toronto real estate numbers are in, so I wanted to share my analysis with you and provide some insights as to what’s really happening in the market. There are some pretty deceiving headlines in the media right now, so if you’re buying or selling, it can be confusing. Hopefully, this will help.
February 2024 Toronto Real Estate Market – Interest Rates
The Bank of Canada announced this month that rates would be held at 5% for the 5th consecutive time. This was widely expected, but many had hoped this would be the start of rate cuts – too early according to my predictions, but it will be interesting to see what’s to come. The next meeting and announcement will be on April 10th, then no other one until June, as there is no May meeting. Something to keep in mind as we enter the Spring market.
It’s important to look at the language used for these announcements, and after looking at the March one, it’s clear that rate cuts are coming, but at a much slower pace than when they went up.
And just this morning, we received the update on inflation – Canada’s annual inflation rate unexpectedly fell to 2.8 percent last month, amid sharp declines in cellular and internet services as well as slower grocery price growth.
Statistics Canada released its February consumer price index report Tuesday, which shows price growth softened for a second consecutive month.
Economists were widely expecting Canada’s inflation rate to have risen above January’s 2.9 percent, in part due to higher gasoline prices.
So what does this mean? It essentially shows that high interest rates are working on taming inflation, which is what they’re looking for to start cutting interest rates.
Needless to say, the next round of BoC announcements will be the ones to watch.
The Overall Market
Looking at the numbers from February, the one key takeaway that doesn’t happen very often is that all prices in all segments were relatively flat. It’s odd to see but it’s making many look at the current market from a different point of view, and realizing all those headlines about bidding wars were in fact totally misleading.
Another key takeaway is that inventory is up! People are selling and I’m hoping the majority of new listings were not due to the false narrative about those bidding wars. As I said last month, yes, many were holding back offers at unrealistic low pricing, but they weren’t selling for inflated pricing. Many homes that were selling with 20+ offers were still selling below or just at market value, and the year-over-year pricing proves just that.
February 2024 Toronto Real Estate Snapshot
Overall, the quantity of home sale transactions in all segments is pretty close to flat. Pricing is also flat as it’s hard to say 1% is a major swing either way. But what is surprising is the number of new listings – up in every segment with the condo market leading the way, and detached homes not far behind.
When we look at the number of days on the market, we’re also seeing that increase in all segments. This means buyers are truly still in the driver’s seat and they’re not being pressured to jump in. They’re also not feeling the pressure of over-bidding for a house when market value will do just fine on the offer nights.
The spring market that is just making its entrance is going to be an interesting one. I predict the number of listings will continue to increase month-over-month, as we see many sellers that were sitting on the sidelines make their way into the market.
I expect another rate hold in April so the wait-and-see game will likely continue. But let’s play this out for all of the buyers out there. Are you really going to wait for a 0.25% rate cut to get into the market when a feeding frenzy will be happening?
Now is the Time to Buy!
I’m telling all of my buyer clients that now is the time. Unless you’re in a position to wait another year until a few rate cuts actually have a big enough impact, you need to get into the market now while inventory is high and pressure is low.
Think about it – you can buy now without the pressure of over-paying, get into a 1-year mortgage and reassess in a year from now. Ok, let’s say the market does pick up and it’s going to be wild out there with all of the buyers competing for homes and condos, driving prices up and inflating the market once again.
Not only are you sitting pretty in your new home, you can sit back and watch the equity build, from the comfort of your new living room.
There is no better market to be in than a buyer’s market because you always make money on the buy, not the sell. Remember that. Buy smart and get into the market now, because it may not be like this in just a few quick months.
I predict June will be the first time we see a rate cut and there is a Bank of Canada strategy to take into consideration here. They don’t want the market to overwhelm, so they’re going to tie in the first cut into a not-so-busy time of year. Summer is traditionally a bit slower and doesn’t have the “spring market” fear in it, so timing could work well for them.
This will allow the rate cuts to roll out with slightly less impact and the new rates to be normalized before buyers are fully back in the swing of house hunting in the fall.
Working with TRB
OK, that was a lot of info to take in but I hope you’ve found it helpful. Now besides crunching all of these numbers for my clients – you may or may not know (but hopefully you do) that I help many clients buy and sell real estate daily. I am the Founder and Lead Broker of Toronto Realty Boutique and I specialize in listing homes and condos, representing buyers of all budgets, I also do a lot of work in the Toronto pre-construction market.
If you’re thinking about buying, selling, or investing and want to discuss strategies, pricing, timing, or anything else, simply complete my form on this page so I can get in touch right away. I’d be happy to answer any questions about the February 2024 Toronto real estate numbers you have or about the Toronto market in general.
~Romey Halabi
Founder & Lead Broker, Toronto Realty Boutique
416-999-1240
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