Momentum in the Ontario and B.C. housing markets persisted into the new year, with home sales continuing to rise in January. Seasonally adjusted MLS® sales were up 6.9% in Ontario and 4.5% in B.C. from the prior month.
Home prices in B.C. rose in January after fluctuating up-and-down since mid-year 2023. However, prices are still 2.6% lower than the peak reached in May 2023, and down by 8.6% from the all-time high recorded in February 2022.
Prices in Ontario are still recovering, with the average sale price dropping by 3.8% in January to reach $842,491, after a 2.7% increase in December. Prices remain 5.8% lower than the peak in May 2023 and 19.0% lower than the all-time high observed in February 2022.
In January, the sales-to-new listings ratio increased slightly in Ontario, going from 52.6% to 53.3%. This suggests that market conditions in the province have remained relatively stable and balanced. Likewise, in B.C., the sales-to-new listings ratio decreased from 52.5% to 50.8% during the same period, indicating a similar trend of balanced market conditions.
Home prices in both markets are likely to remain stable but elevated given limited supply and growing demand. While sales may fluctuate in the early months of 2024, the prospect of mid-year rate cuts could motivate prospective buyers to enter the market and provide some upward price momentum.
However, in Toronto, the condo market faces greater uncertainty than the low-rise market. Usually, only a small portion of newly completed condos are sold voluntarily. With higher interest rates and lower appraised values compared to when units were initially purchased, there could be a rise in involuntary sales for condo apartments. Over the next three years, more than 25,000 condo completions are expected annually. This influx of supply could further constrain prices in the condo market.
Housing Affordability Watch
CMI monitors the latest developments and offers insights on solutions to Canada’s housing affordability crisis
The federal government has announced plans to use public land to enhance affordable housing efforts by building new housing on existing federal properties. While similar initiatives have been done before, like the Victory House program from 1943-1960, exact implementation details are still being worked out. Potential cost savings are substantial, and if executed well, this strategy could help alleviate the affordable housing crisis. However, several crucial steps need to be taken by the government to ensure success.
Read the full article here: Federal Lands Affordability Initiative – Old Wine in a New Bottle
Independent Opinion
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