Real Estate

Ontario Housing Market Outlook 2024

Ontario Housing Market Outlook 2024

Table of contents


    Ontario Market Report Summary

    • Ontario’s benchmark single-family home price decreased by 0% year-over-year to $928,400 in December 2023.
    • Ontario’s benchmark townhouse/multiplex price increased by 0.9% year-over-year to $686,000 in December 2023.
    • Ontario’s benchmark condo price decreased by 1.0% year-over-year to $618,500 in December 2023.
    • Ontario’s benchmark composite home price decreased by 0.5% year-over-year to $851,000 in December 2023.
    • Ontario’s average rent for an apartment increased by 4% year-over-year to $2,446 for December 2023.

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    Ontario Housing Market Outlook

    Data from the Ontario Real Estate Association (OREA) indicates that the average home price across Ontario in December 2023 was $851,000, a decrease of 0.5% compared to a year ago. 

    With a sales-to-new-listings ratio (SNLR) of 86%, Ontario has turned back into a seller’s market for December 2023.

    Verbatim: What local experts from the Ontario Real Estate Association (OREA) say about Ontario’s provincial housing market:

    Residential sales activity reported through the MLS of real estate boards in Ontario numbered 7,723 units in December 2023. This was a minor increase of 2.4% from December 2022. Home sales were 26.8% below the 5-year average and 25.6% below the 10-year average for the month of December. On an annual basis, home sales totalled 161,696 units over the course of 2023. This was a large decline of 12.3% from 2022. Nationally, home sales activity increased by 3.7% from year-ago levels in December 2023.

    The average price of resale residential homes sold across the province in December 2023 was $853,915, increasing by 5.4% from December 2022. The more comprehensive annual average price was $872,312, a decline of 6.3% from all of 2022.

    The national average price, by comparison, was up by 5.1% on a year-over-year basis to $657,145 in December 2023.

    The number of new listings on MLS of real estate boards in Ontario saw a decrease of 6.2% from December 2022. There were 8,960 new residential listings in December 2023. New listings were 9% below the 5-year average and 12.1% below the 10-year average for the month of December. Active residential listings numbered 30,100 units on the market at the end of December, a sizable gain of 19.4% from the end of December 2022. Active listings haven’t been this high in December in 5 years. 

    Active listings were 47% above the 5-year average and 10.1% above the 10-year average for the month of December.

    Months of inventory numbered 3.9 at the end of December 2023, up from the 3.3 months recorded at the end of December 2022 and above the long-run average of 2.8 months for this time of year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

    Month-over-Month Expectations for Ontario’s Housing Market

    The sales to new listings ratio (SNLR) is the number of home sales compared to new listings. An SNLR under 40% suggests a buyer’s market where buyers have the upper hand and more negotiating power. An SNLR between 40% and 60% is a balanced market, while an SNLR of over 60% is considered a seller’s market. 

    Changes to Ontario’s Regional Prices by Property Type

    Historical Changes to Benchmark Prices in Ontario by Property Type

    Historical Changes to Benchmark Prices in Ontario Cities

    Last 10 Years of Monthly Changes to Ontario’s Composite Home Price

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      Who’s Buying Ontario Real Estate?

      Until recently, the primary demographics driving demand in Ontario’s residential property market were those looking to upsize their homes, foreign investors looking to purchase an investment property in one of Canada’s university towns, professionals who recently immigrated to Canada in the past 5 years, and out-of-province migrants advancing their careers in Toronto while maintaining a commutable distance in Ontario. 

      With the passing of the omnibus Bill C-32 legislation, including the foreign buyers’ ban and anti-flipping tax, the Ontario homebuyers’ demographic may be shifting away from foreign investment. However, it remains to be seen whether efforts to limit foreign buyers in Ontario will have an impact; according to Statistics Canada, foreign investors make up less than 5% of homeowners in Ontario’s largest cities’ total homeownership.

      Multi-property Investors

      According to a report by Teranet, investors and multi-property owners accounted for over 25% of Ontario’s homebuyers in 2021, particularly in Ontario, where the numbers were even higher. A report by StatsCan, which tracks the concentration of residential properties owned by investors across Canada, said that investors in Toronto own 29,530 out of the city’s 34,180 condominium apartments, a rate of 86.4% – more than twice the provincial average of 41.9%. Greater Toronto is provincially and nationally the largest real estate market division.

      First-time homebuyers have traditionally accounted for more than half of all purchases. However, that share has slowly declined, reaching a low of 46.8% in June 2021, with real estate investors and multiple property owners picking up the difference. 
      According to Statistics Canada, multiple property owners represent 15% of owners in BC and Ontario and 20% in New Brunswick and Nova Scotia but hold 30% and 40% of existing housing stock, respectively.

      Upsizing Buyers

      Upsizing by buyers has driven Ontario’s demand for single-detached homes, which showed the highest year-on-year price increase of all property types from $697,400 in February 2020, which is still more than 35% lower than today’s price at $945,000. Upsizing buyers continued to explode some of Ontario’s most active real estate markets, like those in Toronto, Ottawa,  Mississauga, Hamilton-Burlington, Brampton, London, Windsor and Oakville-Milton. You’ll notice that most of Ontario’s 7-digit home valuations are centred in and around the Greater Toronto Region.

      Immigration & Out-of-province Migration

      While the pandemic saw thousands of homebuyers leaving urban areas searching for more space and affordable housing, new immigrants are making Ontario homes a continued surge.  Although many Ontarians continue to leave Ontario due to housing affordability limitations, many continue to move here. According to this report by Re/Max, the federal government expects to bring an additional 2 million new immigrants to Canada – many of whom will still choose to settle in Toronto, Vancouver and Montreal.

      First-Time Homebuyers

      Getting a mortgage in Ontario as a first-time buyer can be challenging for many. Ontario has some of the highest property tax rates for a large city, with over 1% of property value in most smaller communities and larger urban cities such as Kingston, Ottawa and London. 

      While programs like the First Time Home Buyer Incentive are in place to help people afford homes in Ontario, this has yet to do much to offset affordability as the stress test makes it harder to qualify. At the same time, the Bank of Canada keeps rates elevated – adding a barrier to qualifying for a home without a combined household income over $150,000. 

      Given the slowdown over the last 12 months in home prices, Ontario remains a difficult market to purchase a first home without outside financial assistance. 

      Final Thoughts

      Ontario’s property market is set to remain strong as increases are expected for the remainder of 2024. The average home price in Ontario has dropped significantly since last year. However, this comes after months of record consecutive price rises during the pandemic and one of the most intense periods of price appreciation the province has ever seen. 

      While the property market appears to be shedding value in Ontario, it’s important to remember that this is relative to a long period of superheating in the area. 

      If you are looking for a home in 2024, expect an imminent turnaround in the housing market over the next few months. Contact our knowledgeable and commission-free mortgage experts at nesto to help guide you through the home-buying process.

      Rents Across Canada Continued to Surge in December 2023

      The Canadian rental market witnessed a transformational surge in 2023, with the average asking rent for all residential properties reaching a historic high of $2,178 in December, a significant 8.6% rise from the previous year. This article analyses Canada’s rental market trends, regional breakdowns, and future outlook.

      Rents Rise Across Canada

      Over the past 2 years, there has been a significant surge in rent prices in Canada, with an impressive growth annualized rate of 22%. On average, tenants have experienced an increase of $390 per month. This surge was fueled by an 8.6% rise in 2023, following a 12.1% increase in 2022 and a more modest 4.6% uptick in 2021. Comparatively, the typical annual rent growth rate in Canada averaged over the past 5 years has been 4.9%, including a decrease of 5.4% in 2020 due to the impact of the COVID-19 pandemic.

      Despite having the lowest average rent in Canada at $2,076, there has been a significant surge in traditional purpose-built rental apartments, experiencing a remarkable annual growth rate of 12.8%. This is in stark contrast to condominium and home rentals, which have experienced comparatively slower annual growth rates of 6.9% and 5.9%, respectively.

      Rents Rise Across Property Types

      In 2023, the cost of renting purpose-built apartments and condominiums experienced a surge of 10.7%, mirroring the growth observed in 2022. As a result, the average rental price reached $2,116 by the end of the year. Among different types of apartments, 1-bedroom units witnessed the most significant increase, with a growth rate of 12.7% and an average rental price of $1,932. Studio apartments followed closely behind, with a growth rate of 11.9% and an average rental price of $1,552. Meanwhile, the average rate of rent for 2-bedroom apartments stood at $2,301, reflecting a 9.8% increase on an annual basis. Lastly, 3-bedroom apartments for rent experienced a 9.9% annual increase, reaching an average rental price of $2,579.

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      Quebec Rents Surged Even More

      In 2023, Quebec stood out as the sole province where the growth in apartment rents surpassed that of the previous year, with a rate of 10% compared to 6.9%. As a result, the average rent for apartments in December reached $1,953. Montreal, on the other hand, climbed to third place in 2023, with an impressive annual rent growth of 11.3%, leading to an average rent of $2,019. When examining the fastest-growing markets for apartment rents in December, both Pointe-Claire and Quebec City, located in Quebec, took the lead with rent growth rates of 25.6% and 18.9, respectively. Other cities within Quebec that made it onto the list of rapidly growing rental markets for 1-bedroom apartments included Laval (+15.4%), Saint-Laurent (+15.3%), Côte-Saint-Luc (+13.4%), and Longueuil (+6.8%).

      Tight Rental Market in BC, Ontario and Alberta

      Despite a 1.4% decrease compared to the previous year, British Columbia retained its status as the most expensive province for apartment rentals in December, with an average asking price of $2,500. Ontario followed closely behind, with apartment rents averaging just below BC at $2,446, representing an annual increase of 3.7% in December. Notably, Ontario’s growth rate was significantly slower than that province’s impressive 15.5% increase recorded in 2022.

      The 4 most expensive small- and mid-sized rental markets in Canada were all situated in British Columbia, with North Vancouver taking the lead at $3,361 in monthly rent. Following closely behind were Burnaby at $2,928, Richmond at $2,898, and Coquitlam at $2,886. The top 5 was completed by Richmond Hill in Ontario, where the average rent reached $2,782. The majority of the remaining top 25 rental markets with high rents were located in the Greater Toronto Area (GTA).

      In 2023, Alberta emerged as the province witnessing the most rapid surge in rents for purpose-built and condominium apartments, experiencing an annual increase of 15.6% in December. This resulted in an average rent of $1,691. Among Canada’s major cities, Calgary recorded the highest growth in apartment rents, with a 14% rise compared to the previous year, reaching an average of $2,071. Meanwhile, Edmonton, where average apartment rents were significantly lower than in Calgary at $1,467, saw a rate of rent growth of 13.5% over the course of 2023.

      Main Factors Driving the Rental Market in 2024

      Several factors are expected to have an impact on the market in the coming year:

      • The demand for rentals is predicted to remain strong, although slightly less intense compared to the previous year. This is due to a slowdown in the economy, a decrease in the number of non-permanent residents, and an increase in homebuying activity as interest rates decrease.
      • In the short term, there will be a continued increase in the number of completed apartments and a rise in tenant turnover, which will contribute to an increase in the supply of rental properties and help moderate the growth of rents.
      • Affordable markets, like those in Alberta, are anticipated to continue experiencing rent increases that are higher than the average.

      Expect higher-priced markets, such as those in British Columbia and Ontario, to experience rent hikes that are lower than the national average. As we look ahead into 2024, the Canadian rental market is projected to continue facing a shortage, but there is a possibility of achieving a better balance this year. The expected increase in rent is likely to align with its historical 5-year average of approximately 5%. Canada’s regional property and rental markets offer promising prospects for home buyers, renters, and investors alike.

      Market Rents Summary

      Each $100,000 in mortgage balance costs an average of $575 per month on nesto’s lowest fixed 5-year rate at and $638 per month on nesto’s lowest adjustable 5-year rate at .  Rates used for calculation are those offered on insured purchases with less than a 20% downpayment on a 25-year amortization.  Each 0.25% change in mortgage rates impacts the monthly payment by $14 on a 25-year amortization.

      Rental Prices Compared to Other Canadian Cities

      Rental Prices Compared to Other Provinces and Nationally

      Average Rents by Housing Type

      Rental Growth by Housing Type

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      Frequently Asked Questions

      Is the Ontario housing market going to crash in 2024?

      Ontario home prices are currently sagging due to surging mortgage rates. Ontario prices remain some of the highest in the country, and with the current Bank of Canada rate hikes, mortgages have been harder to qualify for due to the stress test. Ontario prices will recover quicker than in other areas once mortgage rates decline back to manageable levels for homebuyers to purchase or homeowners to refinance their homes. 

      Will Ontario’s housing prices increase in 2024?

      Although currently declining, many experts believe that a turnaround is imminent.  Buyers are waiting on the sidelines for the opportune time to make a move. 

      How do I get approved for a mortgage in Ontario?

      To get approved for a mortgage in Ontario, look at Ontario mortgage rates and see how much you can afford. This will give you an idea of what it will cost to buy a home in Ontario at today’s prices and rates. You can check out what you need to get pre-approved for a mortgage or start by getting a quote

      How nesto works

      At nesto, all of our commission-free mortgage experts hold concurrent professional designations from one or more provinces. Our clients will receive the best advice and care when they speak with specialists that exceed the industry status quo. 

      Unlike the industry norm, our agents are not commissioned but salaried employees. This means you’ll get free, unbiased advice on the most suitable mortgage solution for your unique needs. Our advisors are measured on the satisfaction and quality of advice they provide to their clients. 

      nesto is working hard to change how the mortgage industry functions. We start with honest and transparent advice, followed by our best rates upfront. We can offer you these low rates using the fintech industry’s best-in-class and safest technology to provide a 100% digital online experience and process to reduce overhead costs.

      By working remotely across Canada, all our mortgage experts and staff spend less time commuting to work and more time with their friends and family. This makes for more dedicated employees and contributes to our success with happy and satisfied clients.

      nesto is on a mission to offer a positive, empowering and transparent property financing experience, simplified from start to finish.

      Reach out to our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.

      EXPLANATIONS

      Rates

      Values

      Rents

      Criteria

      Experts

      Titles

      Interest Rates

      Qualified using nesto’s fixed 5-year insured and uninsured rates as advertised on our website. For today, Thursday, February 29, 2024, our example calculations are qualified on our lowest rates, which may or may not apply to your unique financing situation or long-term goals. Insured fixed-rate mortgages will be qualified at , which is exactly 2% in addition to our fixed insured rate currently at . Uninsured fixed-rate mortgages will be qualified at , which is exactly 2% in addition to our fixed uninsured rate currently at . Insured variable rate mortgages will be qualified at , which is exactly 2% in addition to our variable insured rate currently at . Uninsured variable rate mortgages will be qualified at , which is exactly 2% in addition to our variable uninsured rate currently at .

      We appreciate your patience and understanding and encourage you to email us at website@nesto.ca with information that needs correction alongside your sources.

      Property Values

      Home values collected from CREA or QPAREB are those presented as the composite benchmark or average prices for each city/province/region unless specified. They may be interchangeably called average home prices, though an average price may not be available for many regions outside Quebec.

      Rents

      Our monthly or year-over-year rental averages are sourced from Urbanation’s monthly Rentals.ca National Rental Report.

      Mortgage Qualifying Criteria

      Insured qualifying criteria are limited to a 39% gross debt service (GDS) ratio and up to 25 years of amortization. For insured mortgage transaction calculations, we have used a 20% downpayment, unless otherwise indicated, in our examples and excluded any mortgage default insurance (CMHC) premium. Uninsured qualifying criteria are limited to a 35% gross debt service (GDS) ratio and up to 30 years of amortization. We have used a 20% downpayment for uninsured mortgage transaction calculations in our examples. Unless otherwise indicated, a $100 monthly heating cost is attributed to the total monthly stress-tested payment. Municipal tax rates are the most recently shown on the applicable municipality’s website (1% used as default when unavailable or for a region with an unspecified mill rate). Mortgage default insurance is not permitted on purchases that have valuations of $1 million or more, amortizations exceeding 25 years, or on refinance transactions.

      nesto Mortgage Experts

      Titles such as mortgage broker, mortgage agent, submortgage broker, mortgage salesperson, or principal broker are provincially regulated licensing terms with educational requirements specific to each province. Albeit, commonly, they may all be referred to as mortgage brokers. In Ontario, where mortgage agent is used as a designation, mortgage brokers or principal brokers have additional responsibility for compliance and training mortgage agents.

      Licensed mortgage professionals often use the industry norm of “mortgage broker,” “broker,” or “advisor” to refer to themselves. However, disclosure requirements for licensed mortgage professionals’ titles vary across each province in Canada. These disclosures require mortgage brokers to adhere to specific rules when using titles to represent their qualifications and expertise. The provinces have regulations and guidelines that govern the use of titles by mortgage brokers. These regulations aim to ensure transparency and protect consumers in the mortgage industry.

      Regulatory Titles

      In Ontario (FSRA), Mortgage Brokers and Agents both serve as the middle person between borrowers and lenders, helping clients find the most suitable mortgage options for their financing situation. A Mortgage Agent works under the supervision of a Mortgage Broker and assists in the mortgage application process. A Mortgage Broker may also be responsible for compliance requirements for their brokerage or a team.

      The provinces of Quebec (AMF) and Newfoundland (Digital & Government Service NL) both exclusively utilize the designation of Mortgage Broker as a licensing designation.

      British Columbia (BCFSA) has two distinct roles within the mortgage industry: the Submortgage Broker and the Mortgage Broker. These positions have specific responsibilities and functions that contribute to the overall process of securing mortgages for clients. The Submortgage Broker works under the supervision of a licensed Mortgage Broker and assists in various tasks, such as gathering client information, completing paperwork, and liaising with lenders. The Mortgage Broker oversees the entire mortgage application process, including assessing client needs, finding suitable mortgage options, negotiating terms, and ensuring compliance with regulations.

      In Alberta (RECA) and New Brunswick (FCNB), the distinction between a Mortgage Associate and a Mortgage Broker lies in their roles and responsibilities within the mortgage industry. A Mortgage Associate typically works under the supervision of a Mortgage Broker and assists in the mortgage application process gathering necessary documentation, and providing support to clients. A Mortgage Broker is licensed to independently negotiate and arrange mortgage loans on behalf of clients, offering a more comprehensive range of mortgage options and expertise in the field.

      In Saskatchewan (FCAA) and Nova Scotia (Government of Nova Scotia, Business Licensing), there are distinct roles for both Associate Mortgage Brokers and Mortgage Brokers. The critical difference lies in their level of experience and licensing requirements. Associate Mortgage Brokers work under the supervision of a licensed Mortgage Broker and are in the early stages of their career. They may assist with gathering client information and preparing mortgage applications. Mortgage Brokers have obtained the necessary qualifications and licences to operate independently and provide mortgage services directly to clients. They have the authority to negotiate mortgage terms, advise clients, and facilitate the mortgage process from start to finish.

      In Manitoba (MSC), a Salesperson is primarily responsible for promoting and selling products or services, while an Authorised Official holds the authority to make legally binding decisions on behalf of the organization. These roles have different levels of authority and expertise, with the Salesperson focusing on sales and the Authorised Official having broader decision-making powers and acting as the liaison between the brokerage and the regulator. 

      For a complete list of licensing terms in Canada, please see the Mortgage Broker Regulators’ Council of Canada (MBRCC) published list.


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