Toronto’s housing market has come alive in early 2024

A surge in home sales across Canada’s largest markets to kick off 2024 is unlikely to prompt the Bank of Canada to delay its probable interest rate cuts later this year.

The start of the year has shown signs of a rebound in some major housing markets, including in the Greater Toronto Area, where home sales soared 37 per cent in January compared with the same month a year ago.

Last month’s 4,223 home sales also marked a 22.9 per cent month-over-month increase from December, according to data released Tuesday by the Toronto Regional Real Estate Board. It credited lower borrowing costs associated with fixed-rate mortgages that lured some buyers back to the market.

Other local real estate boards have also reported year-over-year increases in home sales activity last month: Vancouver sales jumped by 38.5 per cent, Calgary, by 37.7 per cent, and Montreal, at 18 per cent.

“Clearly, the mood in the market is starting to improve,” said Benjamin Tal, deputy chief economist at CIBC Capital Markets.

“The market is starting to internalize that interest rates have peaked.”

Tal said the main outstanding question is whether sellers will respond to renewed demand. If the housing market sees improvement in the number of new listings, this would prevent prices from rising too quickly over the next six months.