As we step into the end of February, it's crucial to keep a pulse on the ever-changing landscape of Toronto's housing market. A recent report from the Royal Bank of Canada (RBC) sheds light on some intriguing developments that could shape the broader market in the coming months.
According to the RBC report, we're witnessing "early signs" of a housing market upturn, with January marking the second consecutive month of increased residential transactions in major markets across the country. This suggests that the downturn that began in 2022 might be coming to an end. Economist Robert Hogue, the author of the report, highlights how drops in interest rates for fixed-rate mortgages since November have opened doors for buyers, potentially bolstering confidence.
However, Hogue cautions that a more robust recovery isn't expected until interest rates fall further, likely in the latter half of 2024. The report also notes that Canada hasn't yet seen a surge in sellers due to higher borrowing costs, with new listings remaining on the weaker side. There's a risk of mortgage renewal payment shocks leading to distressed sales, so it's a factor to monitor closely.
In the Toronto area specifically, indications that the housing market may be turning a corner include the recent drops in fixed mortgage rates as well as unusually mild weather that could be influencing buyer behavior positively. However, stretched affordability conditions are likely to keep some buyers sidelined until interest rates or property values, or both, decline more significantly.
According to the RBC report, it's anticipated that prices will reach their bottom this spring, with a gradual recovery expected over the second half of 2024. This suggests that now could be an opportune time for prospective buyers to start exploring their options and for sellers to strategize accordingly. Buyers who are financially stable should take advantage of a less competitive market and prices. On the flip side, those seeking easier affordability can begin looking so they are primed to pounce when rates begin falling.
Whether you're a buyer, seller, or investor, keeping a close eye on how the market unfolds is ideal, beginning your search or planning the opportune time to come to market even better. In either scenario, we are here to help and offer the guidance you need to align with your specific goals!
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