As the Canadian housing market evolves in 2024, Toronto presents unique challenges and opportunities for both renters and prospective homebuyers. Seven Appraisal Inc., a leading real estate appraisal company in Toronto, is here to help you navigate these choices. Understanding current trends and projections is crucial for making the best decision for your circumstances.
The Rental Market in Toronto
Rent Trends and Projections: While rents are expected to continue rising in 2024, the sharp increase seen in 2023 (8% according to Rentals.ca’s National Rent Report) is predicted to
moderate. A potential interest rate cut by the Bank of Canada in July could provide some relief to landlords with high borrowing costs, possibly slowing rent increases or even causing slight
decreases in some areas.
Supply and Demand Dynamics: Although the government’s efforts to boost rental property construction offer hope for affordability, these measures will not impact the market immediately.
The Canadian Housing and Renewal Corporation (CHRC) forecasts a 3-5% increase in rental supply by 2027, which should help balance the market in major cities over the coming years.
City-Specific Insights: Toronto, known for its high cost of living and housing, may see rent growth slow due to stretched affordability limits. This contrasts with cities like Calgary and
Edmonton, where strong job markets and population growth are creating competitive rental environments.
The Homeownership Market in Toronto
Resale Market Outlook: The latter half of 2024 may witness a rise in resale activity, fueled by favorable weather conditions, anticipated interest rate cuts, and pent-up demand from previous years. The Canadian Real Estate Association (CREA) predicts a 10-15% increase in national home sales volume compared to the first half of the year.
Interest Rates and Affordability: A predicted rate cut by the Bank of Canada could make mortgages more affordable, potentially attracting first-time buyers into the market. Despite this, affordability concerns in Ontario could limit price gains compared to other provinces like Alberta, where the average home price remains around $500,000.
Price Stability: While home prices are unlikely to soar as they did during the pandemic peak, significant drops are also improbable. The Canada Mortgage and Housing Corporation (CMHC) expects national average home prices to remain steady in 2024, with modest increases driven by a surge in the resale market.
Renting vs. Buying in Toronto: Making the Right Choice
Financial Considerations: Homeownership involves upfront costs like down payments and ongoing expenses such as property taxes and maintenance. Ensure a stable income and emergency savings to manage these financial commitments comfortably.
Lifestyle and Flexibility: If you value stability and the ability to personalize your living space, homeownership might be the right choice. Conversely, renting offers greater flexibility, allowing
you to relocate easily for career opportunities or changes in personal circumstances.
Long-Term Investment: Homeownership can be a sound long-term investment, potentially building equity over time. This is particularly true if you plan to stay in one place for several years. Renting, however, offers more flexibility without the commitment of a mortgage.
As the housing market in Toronto continues to change, carefully consider your options in light of these trends and your personal circumstances. For expert guidance, consult with a financial advisor or a real estate professional from Seven Appraisal Inc. Our team is committed to helping you make informed decisions that align with your financial goals and lifestyle preferences.