Toronto Housing Market Outlook for 2024

Nobody knows what the future holds, especially when we are talking about a market as choppy as Toronto real estate. But that does not mean we ignore the likely scenarios or the research. There are a few things worth understanding about the 2024 market, and the biggest one is the path of interest rates, because it shapes everyone's decisions.

So let me lay out what I am watching and why I am cautiously optimistic heading into the new year. The goal is not to talk you into anything, it is to help you make better decisions with a clearer picture.

Will the Bank of Canada cut rates in 2024?

This matters because it feeds directly into mortgage rates and sets the tone for the whole market. The Bank of Canada has scheduled 7 meetings in 2024 to announce its rate position. It could hold, raise, or cut, and nobody knows exactly which meeting brings the change. Still, market estimates lean toward a cut being more likely than a hike, and I have seen forecasts that put a strong chance on the first cut arriving in the second part of the year. Remember, a big wave of fixed rate borrowers see their terms end over the next year or two and have to renew, which is a real concern for the government and the central bank.

The Canadian Mortgage Charter

There is also the Canadian Mortgage Charter, a set of guidelines aimed at people who got stretched by higher rates, especially those with insured mortgages. The gist is that when their term ends, they should face better conditions. For example, someone struggling with payments who wants to switch lenders at renewal would not have to be re-approved from scratch and could move to a new lender more easily. The point is to give borrowers the option of a better rate without forcing a full refinance. All of this tells me the government is worried, and with a federal election in the mix, I expect more effort to ease the load on current owners.

What RE/MAX forecasts for 2024

One reason for my optimism is the outlook from RE/MAX, the largest real estate company in Canada and the one I work with. For York Region north of Toronto, they project average prices up about 3.5 percent and transactions up 10 percent versus 2023. For Durham Region in the east, including cities like Ajax, Whitby, Pickering and Oshawa, transactions are seen up about 2 percent. For Toronto itself they expect a balanced market between buyers and sellers, with the condo market recovering from its dip and prices slowly climbing back as developers cancel projects. Keep in mind these are average prices across everything from freehold single family homes to condos, so if you are investing, look at your specific product and area.

Demand stays strong while supply thins

Zoom out and the demand side stays firm. Canada adds between 1 and 3 percent to its population every year, and most of those people want to live in a handful of places, Toronto chief among them. On top of that, 61 percent of Canadians already own homes, and 73 percent say they would prefer to invest in real estate next year. Meanwhile the federal government has no fast fix for the supply problem, and the number of developers pushing projects forward has fallen to its lowest in years. Fewer homes coming to market in the years ahead means the pressure does not ease on its own.

My read on 2024

For these reasons I am optimistic about 2024, and I do not mean dive in blindly. I mean that with the right review of your options, you can take advantage of the conditions that lower rates are likely to create. If you want to invest in this market in the new year and need a plan that fits your situation, fill out the form at the bottom of this page or book a free consultation. Stay well and take care.