Where Is the Toronto Housing Market Heading This Year?

If I had to sum up the housing market in the first half of 2024 in one sentence, it would be this: a resilient freehold market on one side, and rising condo inventory with softening condo prices on the other. Homes across the GTA are still attractive to plenty of buyers, but condo supply is climbing and sales volume is falling. The question is how long this lasts, and whether the condo market turns once interest rates come down.

I am Moe Asgarian, Principal Real Estate Broker in Toronto and ranked number 47 at RE/MAX worldwide. Let me walk through where the GTA market sat in the first half of 2024 and where I think it is going.

Prices, sales, and the inventory story

Start with average sale price for the City of Toronto, all property types. It moved from $900,000 to $1.1 million. That rise is normal though. We see it almost every year because January is a slow market and things warm up from there. Sales volume tells the same seasonal story, climbing from January before dropping off noticeably in recent months. The clearest chart is inventory. In January, Toronto had under 3 months of supply, a firm seller's market where owners held the upper hand. As I record this it has reached close to 5 months. In July, most of that inventory sits in the condo market, though freehold inventory, detached, semi-detached, and townhouses, has risen too.

August and two tips for buyers

August is a special month in Toronto. Someone who lists in August is usually a serious seller, which is a real opportunity for buyers to watch that home. Many of them already bought their next place and need to sell the old one, or they got poor advice earlier and now realize selling sooner means losing less. So I have two tips. First, find where the opportunities are. If you want a condo, look for where demand is lighter and options are wider. A grade-A condo with a great location and a great layout can be bought well below prices we saw before. Second, do not overlook houses in the one to 1.5 million dollar range. There are still strong options there, and if you are looking to upgrade, the numbers favour you. The slower part of the market is really the 1.5 to 2 million dollar range.

My prediction on condo prices

As I record this in mid-August, my prediction is that the average condo price does not rise over the next month or two and probably dips further. Talk to many condo owners about what their unit is truly worth today and they say no, I will not sell that low. But this cannot go on forever. With this large a pile of condos on the market, eventually someone becomes a real seller, and prices ease down. That said, if you own a genuinely exceptional condo, do not worry about selling it. Around 25% of condos out there are truly special, and even in this market they sell in under three to four weeks. Buyers and investors never lose focus on the best product.

Rent versus buy, and what comes next

Many buyers look at the costs of owning a condo, the closing costs, taxes, and maintenance fees, and decide to keep renting. Financially, in today's market, that is not a bad idea. I have helped many clients rent this year. Picture paying $3,500 a month to own versus $2,500 a month to rent. It is natural to rent for now. But money is not the only factor. Plenty of people buy for reasons that have nothing to do with investment, to be near work, to size up for a growing family, to buy for a child in school, or to lock into a neighbourhood so their kid's school never changes. My prediction is that rates come down, and a point arrives where buying beats renting again. If you are waiting to catch the exact bottom, you only learn the bottom passed once the market is already recovering, and you miss it. Stay in the market, keep looking, and with your agent's advice make a strong offer at a number you believe in. If you want help reading this market, fill out the form below or book a free consultation. Stay well and take care.