The average selling price of a Toronto home is expected to rebound in 2024 to hit the second-highest level ever, launching a multi-year recovery in the market, according to an annual outlook released by the Toronto Regional Real Estate Board this week.

TRREB is projecting the average selling price for all residential properties sold in 2024 will hit $1,170,000 a 3.5 per cent increase from 2023 but still shy of the peak of $1,189,850 recorded in 2022.

The report also projects sales will rise for the year, reaching 77,000 units after just 65,982 homes changed hands in 2023. The 2023 totals were down 12 per cent from 2022 and 45.7 per cent below the record in 2021.

TRREB’s chief analyst, Jason Mercer, said the market is poised for more activity but affordability will remain an issue.

“Record population growth, a resilient economy, low unemployment and declining mortgage rates in the second half of the year will result in increased home sales compared to 2023,” Mercer said. “This will be the start of a multi-year recovery as some households will still face affordability challenges, even as borrowing costs begin trending lower. “

Mercer said that as the demand for housing increases, it is crucial for there to be a corresponding increase in the supply of homes available for sale. Additionally, there should be a rise in the construction of new homes to meet this demand.

TRREB’s president, Jennifer Pearce, said that real relief from affordability challenges can only be achieved by removing obstacles to supply and expediting construction projects.

“It’s clear that our regions will only see sustained relief on the affordability front once we remove the roadblocks standing in the way of progress and get shovels in the ground faster. In the wake of a growing population, policymakers cannot lose sight of planning ahead, and avoid applying band-aid solutions that often result in larger issues than the problems they are attempting to solve,” Pearce said.

According to TRREB, accelerating construction projects is especially crucial since survey data included in the report show a dwindling number of homeowners intend to list their properties for sale in 2024. The report notes a decline of two percentage points compared to 2023, with only 37 per cent indicating they are likely to list.

Survey data also indicates that while overall buying intentions have held steady compared to the previous year, there is a subtle dip in the proportion of respondents expressing strong likelihood to purchase a home in 2024.

TRREB chief executive John DiMichele said that there are several crucial measures necessary to address the region’s housing crisis, many of which the board has long championed.

“We need to rapidly increase our supply and assist first-time home buyers with relief on the significant upfront land transfer tax,” DiMichele said. “Prioritizing ‘missing middle’ housing will provide more diverse and affordable housing options — something we have long called for.”