The GTA real estate market is looking grim with home sales trending downwards, a substantial year-over-year increase in new listings and even the benchmark home price in the city on the decline, according to a new report by the Toronto Regional Real Estate Board (TRREB). But analysts say that relief is in sight — lower interest rates are on the horizon for early 2024.

TRREB reported 4,236 home sales in November 2023 — down six per cent compared to November 2022. However, sales did increase slightly month-over-month, a welcome change from a trend this year that has seen sales continually declining on a seasonally adjusted monthly basis since June.

While new listings declined 5.5 per cent month-over-month, compared to the same period in 2022, they’re up 16.5 per cent — leaving buyers with more choice than usual during this season.

The average selling home price in the GTA is at $1,082,179, a 2.2 decrease month-over-month. TRREB also reported a 1.7 per cent month-over-month decrease in the composite benchmark selling price, which is currently at $1,081,300. Year-over-year, the average home price fared better, remaining basically flat with only a 0.3 per cent decrease. 

TRREB president Paul Baron said inflation and elevated borrowing costs have hurt affordability, referring to our “interest rate-sensitive housing market.” But he said that won’t be the case for long. 

“Bond yields, which underpin fixed rate mortgages have been trending lower and an increasing number of forecasters are anticipating Bank of Canada rate cuts in the first half of 2024. Lower rates will help alleviate affordability issues for existing homeowners and those looking to enter the market,” he said. 

Chief market analyst at TRREB, Jason Mercer, forecasted that there will be upward pressure on prices once the region sees some interest rate relief. “As mortgage rates trend lower next year and the population continues to grow at a record pace, expect demand to increase relative to supply. This will eventually lead to renewed growth in home prices,” he said.