GTA to lead the way as price growth set to return

Despite the spring housing market sitting in a holding pattern as buyers await interest rate reductions, the aggregate price of a home in Canada increased 1.9 per cent year-over-year to $824,300 in the second quarter of 2024, according to the Royal LePage House Price Survey. On a quarter-over-quarter basis, the national aggregate price increased 1.5 per cent.

And looking forward, the GTA will lead Canada when price growth resumes.

Unusual dynamic

“Canada’s housing market is struggling to find a consistent rhythm, as the last three months clearly demonstrated,” says Phil Soper, president and CEO, Royal LePage. “Nationally, home prices rose while the number of properties bought and sold sagged; an unusual dynamic. The silver lining: Inventory levels in many regions have climbed materially. This is the closest we’ve been to a balanced market in several years.”

Despite the Bank of Canada’s move to cut the overnight lending rate by 25 basis points on June 5, from 5.0 per cent to 4.75 per cent, buyers did not immediately rush back to the market as initially expected.

“A change in monetary policy drives consumer behaviour in two important ways,” says Soper. “Lower rates mean lower monthly payments, opening the door to some families previously shut out of the market. Secondly, is the psychological signal broadcast to sidelined buyers that the tide is turning, and that market activity is about to pick up again. Not surprisingly, the quarter-point cut to the bank rate didn’t substantially improve the affordability picture. As for consumer sentiment, our early year research indicated that only one in 10 potential homebuyers would be motivated by a tiny rate drop. The tale the market tells as rate cuts get to the point of a material reduction in the cost of borrowing should be a very different one.”

When broken out by housing type, the national median price of a single-family detached home increased 2.2 per cent year-over-year to $860,600, while the median price of a condominium increased 1.6 per cent to $596,500. On a quarter-over-quarter basis, the median price of a single-family detached home increased 1.8 per cent, while condominiums increased 0.8 per cent.

Greater Toronto Area

The aggregate price of a home in the GTA increased 0.9 per cent year-over-year to $1.19 million, in the second quarter of 2024. On a quarterly basis, the aggregate price of a home in the GTA rose 1.1 per cent.

Broken out by housing type, the median price of a single-family detached home increased 1.3 per cent year-over-year to $1.46 million in the second quarter of 2024, while the median price of a condominium increased 1.4 per cent to $741,500 during the same period.

In Toronto, the aggregate price of a home decreased modestly by 0.5 per cent year-over-year to $1.21 million in the second quarter of 2024. However, the aggregate price of a home in Toronto increased 4.8 per cent quarter-over-quarter. The median price of a single-family detached home declined 0.9 per cent year over year to $1.76 million, while condominiums decreased 2.4 per cent to $711,500.

Royal LePage is forecasting that the aggregate price of a home in the GTA will increase 10.0 per cent in the fourth quarter of 2024, compared to the same quarter last year. The GTA is set to see the greatest price appreciation of all major markets.