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In nearly 40% of Canada's hot markets, single-family home values increased in the first half of 2024
Published August 15, 2024 • Last updated 6 days ago • 3 minutes reading time
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On August 7, 2024, a sign stands in front of a house for sale in San Rafael, California. Photo by Justin Sullivan/Getty Images
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In the first half of 2024, experienced buyers and investors drove purchases of single-family homes in Canada's most expensive markets, including the Greater Toronto Area (GTA), Greater Vancouver Area (GVA) and the Fraser Valley, while first-time buyers were deterred by affordability issues, according to a report from Re/Max Canada.
“While affordability continues to be the biggest obstacle for first-time home buyers, more experienced buyers and investors are taking advantage of weaker home prices,” said Christopher Alexander, president of Re/Max, in the Aug. 15 report. He noted that these buyers are making their moves before the end of the Bank of Canada's quantitative tightening program, positioning themselves for potential gains when the market fully recovers.
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The Re/Max Hot Pocket Communities Report, which examined 83 markets in the GTA, GVA and Fraser Valley, found that single-family home values increased in nearly 40 percent of those markets during the first half of 2024. In addition, 30 percent of markets reported an increase in sales. This activity was particularly strong in the GTA's 416 area code, where more than 34 percent of neighbourhoods reported stable or growing single-family home purchase activity, outperforming the 905 region, Greater Vancouver and Fraser Valley.
Toronto's downtown and midtown remain hotspots for single-family homes. Neighbourhoods such as Dufferin Grove, Little Portugal, Trinity-Bellwoods and Forest Hill South have seen a significant increase in home purchases. Alexander highlighted the appeal of these areas, stating, “Vibrant neighbourhoods in downtown and midtown remain a perennial favourite with Toronto buyers as buyers vie for single-family homes in sought-after blue-chip neighbourhoods.”
In contrast, real estate markets in Greater Vancouver and Fraser Valley are struggling with limited supply, which has supported price increases. The leader was Fraser Valley, where 83.3 per cent of neighbourhoods reported an increase in average single-family home prices. This trend was also seen in Greater Vancouver, where 70.6 per cent of neighbourhoods saw an increase in median values. Notable increases were recorded in areas such as Squamish (up 14.2 per cent to $1.57 million), Burnaby (10.8 per cent to $2.16 million) and Port Coquitlam (8.6 per cent to $1.47 million).
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Despite ongoing affordability issues, some first-time buyers are finding opportunities in these markets. “Many buyers in today's market are first-time buyers moving from semi-detached, townhouse or terraced homes to a single-family home,” Alexander said. These buyers have benefited from relatively stable entry-level prices, making the transition to single-family home ownership less stressful than in previous years.
As the market shows signs of recovery, buyers who have not previously entered the market should begin to re-enter. However, challenges remain. Alexander noted that “some first-time buyers are facing significant challenges that are likely to dampen momentum at the entry level.” Government interventions, such as extending payback periods for buyers of pre-owned homes, may provide some relief, but high prices in Ontario and British Columbia may limit the impact.
Although overall home buying activity has slowed, the market is beginning to stabilize. In the GTA, for example, sales increased 3.3 percent in July compared to the same month in 2023. – thus somewhat closing the gap after the four percent year-on-year decline in sales in the first half of 2024.
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Alexander noted that “the tide is turning,” but economic uncertainties such as the possibility of a recession in the U.S. could still impact the market. Buyers will likely remain cautious in the face of potential headwinds and closely monitor economic developments on both sides of the border.
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