As we enter the vibrant season of spring in 2024, lets get home buyers, sellers and investors prepared to mark your wins. With flowers blooming and temperatures rising, the real estate landscape is also experiencing its own set of changes. In this blog post, we’ll delve into the current trends shaping the Spring Housing Market across Canada, providing valuable insights for buyers, sellers, and investors alike.

Spring traditionally heralds a surge in activity within the real estate sector. This year is no exception, with an uptick in listings and heightened competition among buyers. As the weather warms up, prospective homeowners are eager to make their move, leading to increased demand and exciting home listings.

Key trends in the Spring Housing Market, 2024 in GTA:

Moderating Prices

• After several years of rapidly rising home prices, the market can be observed to be stabilising. Home Prices are will be seeing modest month on month growth in this Spring Housing Market. As per WOWA report, the average home price was $659,395 in January 2024, that is a 0.3% monthly increase and 7.7% year-over-year.
• However, prices remain well above pre-pandemic levels, especially in major cities like Toronto and Vancouver where affordability remains very challenging.

Housing Category	Detached	Semi-Detached	Freehold Townhouse	Condo Apartment
Average sold price	$1,443,612	$1,123,896	$1,034,011	$695,345
Percentage increase vs. 02/2023	0% increase	5% increase	2% decrease	1% decrease

Reduction in Interest Rates surging demand in Spring Housing Market

• The Bank of Canada’s interest rate hikes in 2022 and 2023 to combat inflation made mortgages much more expensive and pushed many aspiring home buyers towards the fence.
• Even with the current interest rate (5%), Greater Toronto Area (GTA), experienced a notable increase in home sales, rising by 36% compared to the previous year. Specifically, there were 4,223 transactions recorded for the month of January.
• The Bank of Canada held the interest rate at 5% on 6th March 2024 for 5th consecutive time.
  Assuming inflation continues to align with the trajectory set by the Bank of Canada, economists foresee the possibility of interest rates starting to decline in late Q2 2024. Projections indicate a potential decrease of 100 basis points (bps), bringing the interest rate down to 4.00% by the end of the year.
• The first reduction in interest rate is expected towards late Spring in June 2024. This is expected to trigger a surge in housing demand.
  
  The next interest rate revision announcements are scheduled as follows:
• Wednesday, 10th April 2024
• Wednesday, 5th June 2024
• Wednesday, 24th July 2024

Jason Mercer, Chief Market Analyst at TRREB stated, “As we progress into 2024, more buyers are expected to return to the market, adapting their housing preferences to accommodate higher borrowing expenses.”

Optimal Housing Supply Spring Housing Market

• Housing inventories have increased as more sellers list properties after the frenzy of the last few years.
• On a national scale, January 2024 witnessed a total of 39,399 home sales. This figure reflects a seasonally-adjusted year-over-year increase of 18%, as well as a 4% rise compared to the previous month.
• In January 2024, the sales-to-new-listings ratio (SNLR) for Canada stood at 58.8%. This current SNLR of 58.8% indicates a balanced market, where both sellers and buyers are in a favorable position. Sellers can expect reasonable offers for their properties, while buyers have a variety of options to consider. This balanced market trend is evident across most provincial housing markets in Canada.
  NOTE: The Sales-to-New-Listings Ratio (SNLR) serves as a crucial metric for assessing the equilibrium between housing supply and demand. A SNLR exceeding 60% typically indicates a seller’s market, characterized by limited options for buyers. Conversely, a SNLR below 40% suggests a buyer’s market, where sellers may struggle to secure favorable offers within a reasonable timeframe.

Housing Category	Detached	Semi-Detached	Freehold Townhouse	Condo Apartment
January	1,745	343	765	1,335
February	2495	463	1016	1586
Percentage increase	42.9%	34.99%	32.7%	18.8%

Focus on Affordability

• Affordability remains a key issue for buyers, especially in large urban centers.
  Jason Mercer, Chief Market Analyst at TRREB highlighted, “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.”

Transition to Balanced Market

The Canadian housing market is expected to experience a notable shift towards a more balanced state in the spring months of this year. This transition comes after a prolonged period of frenetic activity, characterized by intense bidding wars and limited inventory.

What to expect as a Home Buyer in Spring of 2024

Increased Affordability:

With the Canadian housing market transitioning to a more balanced state, buyers can expect more reasonable prices and less intense bidding wars, providing greater affordability.

Expanded Selection:

The shift towards a balanced market means buyers will have a wider selection of properties to choose from, offering more options to find a home that meets their needs and preferences.

Reduced Competition:

As the market stabilizes, buyers may encounter fewer competing offers on properties, leading to a less stressful purchasing process and potentially more negotiating power.

Better Interest Rates:

Economists project that interest rates could begin decreasing in late Q2 2024, potentially leading to lower mortgage rates for buyers later in the year.

What to expect as a Home Seller in Spring of 2024

Realistic Pricing:

While sellers may not experience the same level of bidding wars seen in previous years, realistic pricing strategies can still attract motivated buyers and lead to successful sales.

Reduced Days on Market:

With improved market balance between demand and supply, sellers may experience shorter durations for their properties to remain on the market. Reduced days on market can lead to quicker sales and less time spent actively marketing the property.

Potential for Reasonable Offers:

With reduced competition, sellers may receive more reasonable offers for their properties, providing a fair market value without the need for aggressive pricing tactics.

Justo makes Spring season sweeter

• When you buy a home with us in the Greater Toronto Area (GTA), Kitchener, Waterloo and Cambridge Region (KWC), Guelph and Hamilton – we give you up to 50% of the commission we receive. Buy with Justo and claim your cashback

• Our sellers pay only 50% of typical listing fees, saving thousands in commissions! We offer free staging consultation, 3D Virtual Tour, Floor plans, Social Media Campaign, and give our sellers the best market exposure. Sell with Justo and save on listing fees
  

Consult with a Justo expert today to plan your next move in the Spring Market.
Call : 1-647-696-2919

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