Are you keeping a close eye on the Greater Toronto Area (GTA) real estate market? The past few months have seen some intriguing developments, and the October 2023 update is no exception.
Sales Decline, Prices Hold Steady
In October 2023, the GTA market continued to show signs of softening sales. Compared to last year, there was a 5.8% decrease in home sales, a trend that has been persistent over the last few months.
However, amidst this decline, prices have managed to hold relatively steady compared to the previous year. Note average price is still down 16% compared to the peak in February 2022 at $1,334,544.
It’s worth noting that the declines in prices have already surpassed those witnessed in 2017 and 2008, yet there has been no improvement in housing affordability.
Source: @xelan_gta
Interest Rates: Rate Cut Maybe Coming in 2024
A significant factor to consider is the state of inflation, which seems to be under control at the moment. For prospective buyers, the stability of interest rates in both September and October is a positive sign for those looking to enter the housing market.
However, the stress test requires buyers to qualify at 8% or more, due to the current high rates. Consequently, many individuals have turned to the rental market or have chosen to delay their home purchase decisions.
On a positive note, a survey of influential economists and analysts shows many are expecting the Bank of Canada’s first rate cut by April 2024. They expect the Bank to cut rates by a full percentage point in 2024, which would bring the overnight target rate back down to 4.00% and bring buyers back into the market.
Changing Mortgage Rates Landscape
In recent weeks, Government of Canada (GoC) bond yields mirrored their U.S. Treasury counterparts, experiencing a continued decline. Notably, the five-year GoC bond yield saw a significant 0.58% drop over the past two weeks.
In response, we shall see rate drops on various fixed rates, although not as drastically as the bond yield decline would suggest. Nevertheless, fixed mortgage rates are expected to decrease in the upcoming weeks, offering potential benefits to homebuyers and refinancers.
Navigating Uncertainty
In summary, the short-term risks for the Toronto Metro housing market are currently skewed to the downside. Vigilance is key as we closely monitor market behaviour.
Many housing markets around the world, such as Australia, are grappling with similar challenges, suggesting that we are in the midst of a global real estate downturn. The question that looms is at what extent to which this downturn will ultimately unfold.
Your Next Steps
If you’re contemplating a move within the next 12 months, it’s crucial to be well-informed and prepared. Get ahead of the market with your eyes wide open so you can make the best plan for your family. Reach out to us through email or phone call to start a conversation about your specific circumstances and goals. We’re here to guide you through these evolving market conditions, offer expert insights, and help you make informed decisions about your real estate journey.
Stay informed, stay engaged, together we can navigate the ever-changing market and help you achieve your homeownership goals.
Email or call us to get insights on your neighbourhood stats or an up-to-date appraisal of your home.
📱Phone: 647-504-0690
📧 Email: steven@mistersauga.ca
*Your Trusted Partner in the GTA Real Estate Journey*