Home sales, new listings, and sales prices all edged upward in February, indicating that after four years of irregular market conditions and activity, a spring resurgence is on the way. “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 Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce.
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Inventory is Improving but Gems are Moving Quickly
According to TRREB, new listings improved by 33.5% year-over-year and 37% month-over-month. In some cities including Mississauga and Milton, new listings have increased by more than 40% in one month. This is great news for motivated buyers who were struggling with the lack of inventory in the last few months of 2023.
However, sought-after homes are moving quickly. The average property days on market for the Toronto Region declined by 31% month-over-month, now averaging just 37 days. In many cases, homes are moving even faster than that. For example, this well-priced Toronto condo sold on the same day it was listed for more than $15,000 over the asking price. With affordability being top of mind for many buyers, entry-level properties including condo apartments, townhouses, and even semi-detached properties will likely be hot commodities this spring.
Home Prices Remain Flat, For Now
Year-over-year, home prices in the GTA and the 416 remained relatively flat, with the most notable changes in the GTA semi-detached sector, where home prices increased by 5.2% over February 2023. While in the city, the average price of a detached home dipped by 3.5% year-over-year. Meanwhile, month-over-month there have been some modest price gains including in the average price of condo apartments in Mississauga was $630,583, up 6%, while detached homes in Pickering averaged $1,258,047, up 8%. Both of these prices are below the average price in the Toronto region, signaling that well-priced properties are the most in demand.
However, when demand increases, it puts upward pressure on home prices. GTA home sales increased by almost 18% year-over-year in February. The TRREB release states that even when taking the leap year into account, sales were still up by 12% compared to last year. Sales numbers were even greater on a month-over-month basis, improving by 37% across the Toronto Region and even more so in some pockets including Halton Region, where sales increased 39% from January.
Economists are widely expecting a rate hold from the Bank of Canada tomorrow. This could put more downward pressure on fixed rates, which have already declined from the October 2023 peak, providing increased affordability for some buyers. If this is the case, it’s quite likely that sales numbers will continue to increase into the spring market, and eventually home prices.
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