More good news for housing

We hesitate to sound like a broken record, but once again, good news for the new home and housing industry overall bears repeating.

Last issue we highlighted the positive developments that were finally taking place in real estate. As early as February, we could see there was relief on the horizon for housing supply, interest rates, inflation, government policy and other issues that had been causes for concern.

Busy spring season

In anticipation of spring, usually “busy season” in real estate, there was a growing number of reasons to feel optimistic. A pause in interest rate hikes from the Bank of Canada (BoC) – and anticipation of a drop as early as spring – and growing pent-up demand, signaled that homebuying conditions were becoming increasingly favourable.

Now, a number of sources are reporting very positive results. Royal LePage says the aggregate price of homes in the GTA rose 5.2 per cent year-over-year in the first quarter of 2024, and 4.8 per cent on a quarterly basis – including 1.4-per-cent growth in Toronto year-over-year. Even better, the realty firm forecasts GTA home prices to rise 10 per cent in the fourth quarter.

Housing policy

In terms of housing policy, both the provincial and federal government have announced major programs to address the housing supply shortage – including a highly anticipated Housing Plan that Ottawa was to include in Budget 2024, released at press time on April 16.

One caution, perhaps, came from the Bank of Canada’s latest interest rate announcement on April 10, when BoC again held its overnight rate at five per cent.

With no announcement scheduled for May, this sets the stage for June 5, for what many experts believe will be the Bank’s first rate cut since its last hike in July 2023.

By then, we could well be deep into a frothing housing market in the GTA, with new and resale home sales and prices returning to healthier levels.