2024 Hot Pocket Communities Report

Trend-spotting

1. Disenchanted condominium investors have shifted their attention to detached homes on small lots in the GTA’s east end. A joint report on investor losses, from Urbanation and CIBC Economics, found that on average, condo investors who closed on their newly completed units in 2023 saw negative cash flow of close to $600 per month. Given that statistic, it’s not that surprising that investors are revisiting their investment options.
2. Empty nesters and retirees in Halton Region are buying bungalows—many with attached two-car garages on good sized lots—for future use and renting them out in the interim.
3. Blue-chip neighbourhoods remain robust, with buying activity up in Leaside, Rosedale, and the Kingsway, compated to year-ago levels. The Beaches and Vancouver West experienced an uptick in detached values year-over-year.
4. Chronically undersupplied micro-markets in Toronto’s downtown and midtown areas are experiencing healthy demand, with multiple offers a frequent occurrence. Unlike 2021 and 2022, accepted offers were rarely over list price.
5. An influx of buyers into West Vancouver/Howe Sound is attributed to an anticipated uptick in housing values as the Bank of Canada (BoC) winds down its quantitative tightening mandate.
6. Durham Region is the most affordable area for detached homes in the GTA, with average prices under $1 million in multiple communities. Softer housing values north of the GTA have sparked an increase in demand in more affordable areas including Newmarket and Stouffville.
7. Trade-up buyers are taking advantage of lower housing values to take the next step in home ownership, especially in the top end of the GTA. Detached housing sales over the $5-million price point in the Greater Toronto Area are up close to 19 per cent, with 127 detached sales reported in the GTA in the first six months of the year, compared to 107 sold during the same period in 2023.
8. Taxes remain an obstacle, particularly in Greater Vancouver, where both residents and non-residents are faced with the city’s empty house tax. On a vacant $1.5-million property that is not a principal residence, the 3.5 per cent rate would bring the annual tax bill to $52,500 (3 per cent city/0.5 per cent province). The cost would be even greater for a foreign owner or satellite family.
9. Some investors in the GVA are upscaling their principal residences in lieu of purchasing investment properties to circumvent the recently implemented capital gains increase.

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