Pent-up demand begins to push activity in detached markets – ReMax

Move-up or down buyer segments, as well as investors, have been fuelling detached homebuying activity in the first six months of 2024 in the GTA and elsewhere in Canada, according to a report from ReMax Canada.

Hot markets

The ReMax Hot Pocket Communities Report surveyed 83 markets in the GTA, the Greater Vancouver Area and the Fraser Valley, and found that close to 40 per cent of markets reported an increase in detached housing values in the first half of the year, while 30 per cent reported an upswing in the number of sales. The GTA’s 416 area code led the other regions in rebounding sales momentum, with slightly more than 34 per cent of neighbourhoods stable or experiencing growth in detached homebuying activity – ahead of the 905, Greater Vancouver and Fraser Valley.

“While affordability remains the top obstacle for first-time homebuyers, more experienced buyers and investors are taking advantage of softer housing values, making their moves ahead of the Bank of Canada’s (BoC) end to quantitative tightening,” says ReMax President Christopher Alexander. “Pent-up demand continues to build, with an estimated 20,000 to 25,000 buyers currently lying in wait in the GTA, and another 5,000 buyers in the Greater Vancouver area ready to pull the trigger. The first interest rate cut in June did little to incentivize buyers, but early indications show the second may have struck a nerve.

“While buying intentions slowed, new household formation, lifecycle events, immigration and population growth have continued,” adds Alexander. “The right conditions will undoubtably unleash demand. Meantime, certain neighbourhoods have proven stronger than others.”

GTA highlights

In the Greater Toronto area, pockets that posted notable percentage gains in homebuying activity include Dufferin Grove, Little Portugal, Trinity-Bellwoods, Palmerston-Little Italy, Niagara, University, Kensington-Chinatown, Bay St. Corridor, Waterfront Communities; Oakwood Village, Humewood-Cedarvale, Yonge-Eglinton, Forest Hill South; Rosedale-Moore Park; Leaside, Thorncliffe Park, Flemingdon Park; Rockcliffe-Smythe, Keelesdale-Eglinton West, Caledonia-Fairbank, Corso Italia-Davenport, Weston-Pelham Park.

“Vibrant downtown/midtown communities remain a perennial favourite with purchasers in Toronto, with buyers vying for detached properties in coveted blue-chip neighbourhoods such as Rosedale-Moore Park, Forest Hill South, the Kingsway, Leaside and The Beaches, as well as gentrified areas including Trinity-Bellwoods, Palmerston-Little Italy, and Corso Italia-Davenport,” says Alexander. “The ongoing evolution of these neighbourhoods continues to prop up demand as buyers at all price points are drawn to their attractive walkability scores, entertainment and amenities, including parks, restaurants, trendy shops and cafes.”

In the GTA, 40 per cent of communities in the 905 reported an upswing in average price, with the highest gains reported in Scugog in Durham Region and Stouffville in York Region. Upward trending, albeit more moderate, was also reported in detached house values in York Region – Aurora, Newmarket, Richmond Hill; Durham Region; and Halton Region.

Toronto highlights

In the city of Toronto, almost 29 per cent of markets registered upward momentum in detached housing values. The highest increase was noted in the Kingsway South, Princess-Rosethorn, Edenbridge Humber Valley, Islington-City Centre West, Etobicoke-West Mall, Markland Wood and Eringate-Centennial-West Deane, followed by High Park North, Junction Area, Runnymede-Bloor West Village, Lambton-Baby Point, Dovercourt-Wallace, and Emerson Junction.

Many purchasers in today’s market are first-time trade-up buyers, moving from semi-detached homes, townhomes or link dwellings to detached housing,” says Alexander. “This cohort has been fortunate in the sense that the entry-level price range has been relatively sheltered from downward pressure and has made the step up to a single-detached ownership less onerous than in past years. While affordability remains top of mind, first-time trade-up buyers were active in various pockets and price points.”