Market Update • March 5, 2024

Buyers Re-Enter the GTA Housing Market in February

by Gerald Lawrence

TORONTO, ONTARIO, March 5, 2024 – Greater Toronto Area (GTA) home sales and new listings were up on an annual and monthly basis in February 2024. Selling prices also edged upward compared to a year earlier. Population growth and a resilient regional economy continued to support the overall demand for housing. Higher borrowing costs kept home sales below the February sales record reached in 2021.

“We have recently seen a resurgence in sales activity compared to last year. The market assumption is that the Bank of Canada has finished hiking rates. Consumers are now anticipating rate cuts in the near future. A growing number of homebuyers have also come to terms with elevated mortgage rates over the past two years. To minimize higher monthly payments, some buyers have likely saved up a larger down payment, chosen to purchase a less-expensive home type and/or looked to a different location in the GTA,” said TRREB President Jennifer Pearce.

REALTORS® reported 5,607 GTA home sales through TRREB’s MLS® System in February 2024 – an increase of 17.9 per cent compared to February 2023. Even after accounting for the leap year effect, sales were up by 12.3 per cent year- over-year. New listings were up by an even greater annual rate than sales in February, pointing to increased choice for buyers. On a seasonally adjusted month-over-month basis, February sales were lower following two consecutive monthly increases while new listings were flat. Monthly figures can be somewhat volatile, especially when the market is approaching a transition point.

Home selling prices in February 2024 remained similar to February 2023. The MLS® Home Price Index Composite benchmark edged up by 0.4 per cent. The average selling price of $1,108,720 increased by a modest 1.1 per cent. On a seasonally-adjusted monthly basis, both the MLS® HPI Composite and the average selling price edged upward.

“As we move through 2024, an increasing number of buyers will re-enter the market with adjusted housing preferences to account for higher borrowing costs. In the second half of the year, lower interest rates will further boost demand for ownership housing. First-time buying activity will also be a contributing factor, as many renters look to trade high monthly rents for a long-term investment in which they can live and build equity,” said TRREB Chief Market Analyst Jason Mercer.

“Population growth has been at a record pace and with the anticipated lower borrowing costs, the demand for housing – both ownership and rental – will also increase over the next two years. Unaffordable housing not only has a financial impact but also a social impact. Recent research conducted for TRREB by CANCEA in our 2024 Market Outlook and Year in Review report underscores the negative impact of unaffordable housing on peoples’ mental health and life satisfaction. It’s comforting to see that there has been some real building happening in the GTA and that the provincial government is rewarding those municipalities that are working to eliminate the red tape and meet those homeownership needs,” said TRREB CEO John DiMichele.

I wanted to extend an invitation to schedule an introductory call with me. This call will be an opportunity for us to get to know each other better and discuss any real estate-related questions or plans you may have. You can easily book a time that works for you by clicking on the following link: Calendly Link – Schedule a Call Or Visit!.

I look forward to connecting with you soon.

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News Update: CMHC To End First-Time Homebuyer Incentive Program

by Gerald Lawrence

IMPORTANT – February 29, 2024

The First-Time Home Buyer Incentive has been discontinued.

The deadline for new or updated submissions for the First-Time Home Buyer Incentive is midnight ET on March 21, 2024.

For new and resubmitted First-Time Home Buyer Incentive applications

All new applications and resubmissions for previously cancelled or declined applications must reach the Program Administrator by March 21, 2024 (midnight ET).

In cases where an application was previously cancelled or declined, it must be resubmitted and received by the Program Administrator before the March 21, 2024 (midnight ET) deadline.
If an application is submitted on or before the March 21, 2024, deadline (midnight ET) and is declined due to an application error, the mortgage loan insurer is responsible for rectifying the issue and resubmitting the application.
Applications resubmitted after March 21, 2024 must undergo a manual review. Requests for such reviews must be submitted no later than March 25, 2024 (midnight ET).

The Program Administrator will process applications received before the deadlines promptly. No new approvals will be granted after March 31, 2024.

For approved applications

The Program Administrator will continue to consider post-approval changes, following the guidance outlined in the Operational Policy Manual (PDF) available on the Place to Call Home website (refer to section 6.3).

For inquiries: FTHBIOps@cmhc-schl.gc.ca

About the Program

The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.

The First-Time Home Buyer Incentive is a shared-equity mortgage with the Government of Canada, which offers:

5% or 10% for a first-time buyer’s purchase of a newly constructed home
5% for a first-time buyer’s purchase of a resale (existing) home
5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

The shared equity component of the incentive means that the government shares in both the upside and downside of the property value, up to a maximum gain or loss equal to 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage. The effect of the larger down payment is a smaller mortgage, and, ultimately, lower monthly costs.

The homebuyer will have to repay the Incentive based on the market value of the home at the time of repayment equal to the percentage (for example, 5% or 10%) of the original home value used to determine the Incentive, up to a maximum repayment amount equal to:

(i) where the home’s value has appreciated, the Incentive plus a maximum gain of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment; or

(ii) where the home’s value has depreciated, the Incentive minus a maximum loss of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a pre-payment penalty.