The Bibby Group | January 2024 Newsletter
After a less-than-inspiring conclusion to 2023, it feels as though Toronto’s real estate market is slowly becoming unstuck. Amid the most challenging marketplaces in recent years for sellers in Toronto, the New Year has been slightly more upbeat—showings on existing properties have improved significantly, and we’ve started to see supply levels trend downwards. In what would usually be a slower time of year for residential real estate, our team has participated in four transactions this month, hopefully portending renewed interest and improved consumer confidence.
As many unsuccessful sellers have come to terms with the statistical data of recent months, negotiations have started to become more fluid as we see more flexibility in the marketplace. The Toronto Real Estate Board released its most recent Market Watch report last week. Although year-over-year prices have declined slightly, since the spring of 2023 (peak market), Central Toronto condominium prices decreased approximately 9%, while detached homes have trended downwards by approximately 13%. Overall, transactions at the moment are down by approximately 65% from last spring. The upside, however, is that declining prices have made entering the marketplace a more palatable proposition, as a growing number of buyers we are currently communicating with feel like a tipping point is in sight.
While many remain optimistic that the Bank of Canada has completed its interest-rate hike cycle and will start cutting rates later in the year, we will have to continue monitoring supply in the coming months. Some financial institutions have already discounted fixed-rate mortgages as bond yields decline, likely contributing to the slight uptick in transactions in recent weeks.
That said, it is not all clear sailing as we navigate ahead. For instance, as soon as there is an opening for sellers to enter a more successful marketplace, many will use this opportunity to list their properties, which could contribute to a higher supply level. Furthermore, the December 2023 inflation numbers came in higher than expected, which could cause the Bank of Canada to delay its expected rate cuts.
To conclude, I am highly confident there are many potential sellers looking to exit from the marketplace in 2024. For now, proper pricing, presentation and strategy appear to be getting the process moving in the right direction. My best advice for sellers is to remain flexible regarding timing your listing, as many are waiting for the magical “spring market” of the past.