What Can We Expect From the Ontario Housing Market in 2024? (2024)

Ontario presents a dynamic condo market that will likely pick up as the year develops.

At GTA-Homes, our team of skilled Platinum Agents connect with clients and developers across Ontario every day. We witness the story of the Greater Toronto Area (GTA) pre-construction condo market first-hand. We learn about the market from all sides by meeting with developers, clients, and industry leaders, as well as investors ourselves. It is our goal to set our clients up for success so they can create a prosperous future.

What will happen in Canada's real estate market in 2024? Here's our take on the Ontario housing market and what we can expect going forward in 2024.

Condo Real Estate News in the Ontario Housing Market

Sales are likely to remain slow and pick up when interest rates drop.

Sales of new condos have been slow in Ontario this year, and not many new projects are launching as a result. We normally see about 120 new condo projects launch per year, with high-launch times typically taking place from February to June and again from September to November. We usually see about 50 projects launch in the spring and 50 in the fall, with a few other launches scattered throughout the year.

In contrast, in 2023, we saw only about 70 projects launch all year in the Ontario housing market, and, on average, developers only sold about 30% of these units. This low absorption rate has slowed down construction. Developers need to sell approximately 80% of their units to investors before turning to lenders like major banks for further construction financing.

As a result, we're seeing very few upcoming projects launching this year. Many projects were earmarked to launch in the fall of 2024 in the Ontario housing market, but developers have decided to hold back and wait for the market outlook to improve. Once interest rates begin to come down, demand for new condos is expected to rise, and major players are waiting for that moment to arrive.

Of the dozens of projects initially slated to launch in the fall of 2024, just a handful have announced to date that they actually plan to do so. These include properties in Toronto neighbourhoods such as The Junction, The Junction Triangle, Deer Park, Willowdale, and Don Mills. Condo projects will also launch at this time in Pickering, Mississauga, and the Niagara Region.

Just four new projects, One Roxoborough West Condos (Toronto), Louie Waterloo Residences (Waterloo), Alister at Solterra Townhomes (Guelph), and (Richmond Hill), are now selling in the spring of 2024.

What does this mean? Now can be the perfect time to act and find a great deal in the Ontario housing market when demand is low, and the ball is in the buyer's court. It's an investor's market in the pre-construction mid- and high-rise condo markets.

Real Estate News in the Toronto Housing Market

Developers will continue to sell current inventory.

Because developers weren't able to sell the number of units they needed to last year, they're now selling inventory and refraining from launching new projects. To keep their inventory attractive to buyers, prices on remaining condos are staying steady across the Ontario housing market in the pre-con condo sector. This is unusual. Typically, prices on pre-construction condos rise year-over-year and quarter-to-quarter. Our stats show this current period marks the first time in over a decade that pricing has stayed the same, marking a substantial market change and a moment investors may be wise to take advantage of.

As stated above, new projects are expected to launch in The Junction, The Junction Triangle, Deer Park, Willowdale, Richmond Hill, and Don Mills in the fall of 2024.

Interest Rates in the Canadian Housing Market

Interest rates may drop by up to 1.5% by year-end.

Experts have predicted the Bank of Canada may drop interest rates by up to 1.5% by the end of the year (2024). Meetings with developers have revealed that new condo pricing in the Ontario housing market is set to rise as soon as market demand goes up, which may possibly be at the beginning of this summer.

Interest rate announcements are made eight times a year by the Bank of Canada. The next announcements in 2024 will be on the following dates:

• April 10
• June 5
• July 24
• September 4
• October 23
• December 11

Home buyers looking to purchase a condo in the Ontario housing market to live in are advised that this is the time to get a superb price on a brand unit. If you can wait until construction is complete and you don't need to move right away, this is the time to forego the resale condo market and secure your spot in a high-quality pre-construction building.

When Will Prices Go Up?

Prices will hold steady and likely rise by 2025.

Exactly when Canadian housing prices are expected to go up is uncertain, but many experts in the Ontario housing market are eyeing June 2024. This is when the first interest rate cuts are rumoured to possibly begin. With low mortgage rates come rising prices and increases in the average rent as well. It may take a while for any change in interest rates to settle in and have an effect on the market, but we're predicting home prices to rise by the fall of 2024.

Historically, apart from 2023, prices on GTA pre-construction condos have typically increased due to inflation and rising construction costs by about $100 psf per year, rising about $25 psf per quarter.

It's worth noting that the pre-construction industry in the Ontario housing market has seen a strong uptick in low-rise demand recently. For the past month, clients have been camping out at low-rise sites in order to land a unit, showing demand is high in this arena. The resale market is also picking up, which is a huge indicator that the market for pre-construction high-rise condos will also likely soon follow.

Ontario Housing Market: Developers Will Continue to Offer Perks

Buyers can benefit greatly from today's incentives.

As prices stay steady and demand slow, developers are offering a lot of incentives, some of which we've never seen before, in order to entice buyers. This includes extended deposit structures that allow you to commit to a pre-construction condo with as little as $10,000 upfront. Your initial deposit is typically followed by additional deposits of about 10%-20% of the total purchase price of the condo in the months thereafter, plus closing costs and additional fees.

Incentives now being offered can also include:

• Free or discounted parking and/or storage locker
• Free assignment
• The right-to-lease during the occupancy phase
• Capped development charges
• Zero development charges
• Two-year maintenance credit
• Two-year property tax credit
• Credit to cover some closing costs
• Mortgage covered for two years, and much more

New condos in the Ontario housing market are also seeing extensive smart home features as the norm, making them more convenient and safer. This includes an app used to enter your condo, smart locks, smart video features, smart lights, thermostats, and smart parcel lockers.

Assignment Sales Will Continue to Grow

Now could be an ideal time to invest in generational wealth in the Ontario housing market.

Conversations with industry leaders are also showing assignment sales keep growing in the Ontario housing market at the moment, and this is expected to continue as long as interest rates remain elevated. Assignment sales can offer an excellent opportunity to build generational wealth as an investor. Experts say many clients decide to buy a condo for their kids to use in university or college or as their own first home. An assignment sale can also present a fantastic entry into the Ontario homeowner's market for those buying a condo to live in themselves, whether as first-time buyers or downsizers.

Contacting a skilled pre-construction agent can help you learn more about these unique sales opportunities.

Average Rental Rates

The rental market in the Greater Toronto Area is expected to remain tight.

Real estate news sources show the average rental rate for a one-bedroom apartment in Toronto in Q4-2023 was $2,552, up 2.2% year-over-year. One-bedroom townhouses were a bit lower, with an average rent of $2,340 in Q4-2023. Rental rates are expected to rise again whenever interest rates drop and housing prices rise.

Oshawa, Innisfil, Bradford, and Brampton have witnessed some of the lowest average rental rates, and Downtown Toronto has some of the highest. Owning a new condo now, at a premium price, can help you benefit sooner from future rental increases if you plan to rent your unit out to tenants.

GTA-Homes Platinum Agents Offer Value and Insight

The Ontario housing market pre-construction condo scene in Toronto requires a professional approach for optimal results. Our team of award-winning developer approved Platinum real estate agents have access to the best deals across the GTA. Our exclusive relationships with developers allow us to provide our clients with access to industry knowledge, the best choices in floor plans, pricing, and incentives before these new condo units are released to the public.

For more information, we invite you to register for our free weekly introductory seminar on the pre-construction market, which is available online. Use the link below to reserve your seat for our Online Condo Investment Seminar. Learn about this fascinating industry and how you can benefit.