GTA to lead the way in 2024 home price growth – Royal Lepage

Royal LePage is forecasting that the aggregate price of a home in Canada will increase 9.0 per cent in the fourth quarter of 2024, compared to the same period last year – with the Greater Toronto Area among the leaders in growth.

According to the latest Royal LePage House Price Survey, the aggregate price of a home in Canada increased 4.3 per cent year-over-year to $812,100 in the first quarter of 2024.

On a quarter-over-quarter basis, the national aggregate home price increased 2.9 per cent, an indication that sidelined buyers are rebooting their real estate purchase plans ahead of expected interest rate cuts.

Tipping point

“Consistent with our previous forecast, the market did reach a critical tipping point in the first quarter of 2024, when home prices bottomed out and began to appreciate again,” says Phil Soper, president and CEO, Royal LePage. “Clearly, more and more buyers are motivated by the need to get ahead of rising home prices, rather than adopting the strategy of waiting for mortgage rates to fall.”

Within the first months of the new year, the Canadian housing market has already recorded solid price appreciation and higher sales activity. Starting in July of 2023, the Bank of Canada has held rates steady through six review periods. This has prompted many homebuyers to come off the sidelines in advance of what they expect will be a more competitive spring market that will drive home prices higher.

“Many consumers – particularly first-time buyers – who have the capacity to transact have accepted and adapted to the higher borrowing cost environment. Thus, the modestly-rising home prices we are experiencing today,” Soper says. “Once the central bank does make a move, and that first highly-anticipated cut to rates is made, even if it is only by 25 basis points, I expect we will see the price appreciation curve steepen upwards when the highly rate-focused crowd jumps into the market.”

The Royal LePage National House Price Composite shows the national median price of a single-family detached home increased 4.5 per cent year-over-year to $845,300, while condominiums grew 3.5 per cent to $591,900. On a quarter-over-quarter basis, the median price of a single-family detached home increased 3.6 per cent, while condominiums rose 1.4 per cent.

“Given the strong start to 2024, the cadence of the market for the balance of the year points to a normally busy spring market that will lead into an uncomfortably busy fall. It is clear we are rapidly transitioning away from a buyers’ market and back to an environment where the seller has the upper hand,” notes Soper.

The aggregate price of a home in the greater regions of Toronto and Montreal are forecast to increase 10 per cent and 8.5 per cent year-over-year, respectively, in the fourth quarter of 2024, outpacing price gains in the city of Calgary, which was previously expected to see the greatest increase in home values this year.

GTA highlights

The aggregate price of a home in the GTA increased 5.2 per cent year-over-year to $1.17 million in the first quarter of 2024. On a quarterly basis, the aggregate price of a home in the GTA rose 4.8 per cent.

Broken out by housing type, the median price of a single-family detached home increased 3.9 per cent year-over-year to $1.45 million in the first quarter of 2024, while condominiums rose 3.7 per cent to $733,600.

“The first three months of the year were busier than expected in Toronto and the surrounding regions,” says Karen Yolevski, chief operating officer, Royal LePage Real Estate Services Ltd. “Warm winter weather and the anticipation of tight competition once the Bank of Canada reverses course on part of its steep interest rate hike campaign have prompted some buyers who had been sidelined last year to re-enter the market with a renewed sense of purpose.”

In Toronto, the aggregate price of a home increased 1.4 per cent year-over-year to $1.16 million in the first quarter of 2024. During the same period, the median price of a single-family detached home increased 3.1 per cent to $1.70 million, while condominiums rose 1.3 per cent to $714,900.