The real estate market in Ontario, specifically in the GTA, had its ups and downs. Let’s take a moment to reflect on the major trends we saw throughout the year, and what it could mean for 2024.
2023 picked up where 2022 left off, with rising interest rates
Early 2023 marked the one year anniversary of the Bank of Canada’s first interest rate hike. Compared to January 2022, in the first month of 2023 both the number of homes sold and the typical sale price were down significantly, showcasing the impact of higher borrowing costs.
After a modest rate hike in January, many believed this would be the peak and that rates would begin to come back down as early as the fall. As we know now, this has not been the case.
Putting some spring back into the market
As we moved into the warmer spring months, the market began to heat up accordingly. The Bank of Canada held rates flat in March and April while inflation rates continued to decrease through the spring. This resulted in buyers returning to the market with renewed confidence, increasing sales volumes significantly each month from January to May. The median home sale price also began to rise, climbing 15% from January to May, as competition grew between homebuyers.
Temperatures rose while the market cooled
As the hot spring market gave way to the summer slow down, continuing inflation drove central banks to increase rates even further, beyond the levels they had indicated earlier in the year. The Bank of Canada rate hikes in both June and July brought the benchmark rate to 5% for the first time in over 20 years, an unwelcome surprise for both homebuyers and owners.
These unexpected hikes, along with revised guidance from central banks on the persistence of inflation and the potential for rates to remain “higher for longer”, worked to cool the market. Sales volumes and home sale prices continued to drop off through the summer.
Wrapping up 2023 and looking forward to 2024
Throughout the fall prices remained relatively stable with low sales volumes alongside steady, though elevated, mortgage rates. Most recently, while prices are down from the highs seen in the spring, November’s average sale prices are still up from where they were when we started the year.
While we can’t know for certain what 2024 will have in store, experts are forecasting favourable conditions for homebuyers. Lower interest rates will make it easier to break into the market while an increase in supply should mean buyers will have more options. Increased demand may raise prices in some areas, but they are expected to stay lower than the sky high numbers we got used to seeing during the pandemic.
Interested in learning what this year looked like for Ourboro? Check out 2023 Milestones: A look back at what we accomplished together.
With some markets already being deemed a buyers market, we’re looking forward to helping even more homebuyers become homeowners in 2024.
