The GTA real estate recovery may already be underway

You may recall in our Outlook 2024 special report in the Jan. 27 issue of HOMES, there were early signs that 2024 is shaping up to be a much better year than its predecessor. Housing supply, interest rates, inflation, government policy and other issues were a cause for concern last year, but there was relief already on the horizon.

(And if you happened to missed that issue, you can find the updated version of the story on nexthome.ca.)

Turning a corner

“I see 2024 bringing a stronger real estate market,” says Deena Pantalone, managing partner and chief innovation officer at National Homes. “The fundamentals are all there. The job market, population growth and income are all healthy and, with the lower sales of last year, there is so much pent-up demand. Remember the old adage, ‘When is the best time to buy real estate? Yesterday.’ All we need is downward movement on interest rates – even a slight lowering – and sales will start to rise again.”

More good news came on Feb. 14, when the Canadian Real Estate Association said there are signs the recovery may already be underway.

“Sales are up, market conditions have tightened quite a bit, and there has been anecdotal evidence of renewed competition among buyers,” says Shaun Cathcart, CREA’s senior economist. “However, in areas where sales have shot up most over the last two months, prices are still trending lower. Taken together, these trends suggest a market that is starting to turn a corner, but is still working through the weakness of the last two years.”

Then just before press time, on Feb. 20, Statistics Canada released the Consumer Price Index for January, showing that inflation is trending down – to 2.9 per cent on a year-over-year basis, from 3.4 per cent in December.

Rate relief

With such important signposts providing hope, we now await Bank of Canada’s action on interest rates. High inflation was the main reason BoC maintained higher rates than a few years ago, again holding its target for the overnight rate at five per cent on Jan. 24.

Most experts were expecting rates to begin declining in spring, so this progress aligns perfectly with the Bank’s next rate announcement on March 6. Rate relief might come then – though more likely on the following announcements on April 10 or June 5 – but it’s clear conditions are improving.

Strong fundamentals, more homebuying activity, pent-up demand – and hopefully very soon – lower rates will spur all kinds of activity on the homebuying and building fronts.

Use this time, then, to prepare and plan your homebuying move, so you’re ready to take advantage when the opportunities arise.