The Bank of Canada has been steadily lowering its benchmark rate since June, with the most significant cut of 0.50% on October 23rd, bringing the overnight lending rate to 3.75%. Despite these reductions, the Toronto and Region residential resale market initially responded with caution, further stalling buyer activity. With mortgage rates still high and house prices remaining elevated, many buyers are waiting for a more favorable market. As a result, sales performance throughout the summer and early fall was notably weak, reflecting one of the slowest periods in recent decades.
All that changed in October with a surge in home sales that could mark a significant moment for the GTA (Greater Toronto Area) real estate market. The four rate cuts have provided some affordability relief and buyers started stepping off the sidelines. In October 6,658 properties were reported sold by the Toronto Regional Real Estate Board (TRREB). This is a 44.4% improvement over the 4,611 properties reported sold last October and up from 4,996 sales in September, an increase of 33% month-over-month. This has helped to absorb the surging inventory levels from last month in September, when the GTA housing market saw its highest number of active home listings since November 2008.
Although this is a substantial, and welcome improvement, it is still lower than the typical number of sales in October over the past 15 years. As an example, in October 2011, 7,642 homes traded hands.
Of the total homes sold, detached homes continued to lead transactions with 3,139 sales in October, followed by 1,722 condo sales, 1,123 townhouse sales, and 612 semi-detached sales.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October. The positive affordability picture brought about by lower borrowing costs and relatively flat home prices, prompted this improvement in market activity,” said Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce.
Active listings in October 2024 have now slightly leveled off to 24,481, down 4.4% monthly while still being up 25% over last October. It’s the highest number of active home listings that Toronto has seen for the month of October since 2008. The number of new listings coming to market slowed in October. There were 15,328 new listings added in October 2024, which was down 15.3% compared to September 2024, however still up up 6.5% from the same period in the previous year.
The much larger rise in home sales relative to new listings meant that October 2024’s sales-to-new-listings ratio (SNLR) jumped to 43%, quite higher than September 2024’s SNLR of 28%, bringing the GTA back into the balanced market territory. This can be seen in the fact that new listings decreased by 15% monthly, compared to sales increasing by 33% monthly. The City of Toronto’s SNLR for October 2024 was similar, at 42%.
With a slightly tighter market in October, we already saw the average selling price in the GTA inch up by 1.1% compared to October 2023 to $1,135,215 and a 2.5% month-over-month increase from September. It’s the first time that Toronto’s housing market has seen an annual gain in its average home price since April 2024.
Regionally, the City of Toronto experienced strong growth in October 2024 as the city’s average home price jumps to $1,165,660, up 4.7% monthly and up 3.4% annually. The City of Toronto’s home sales are up 39% monthly and 37% annually, while the median Toronto home price has also increased by 4.5% month-over-month and 4.3% year-over-year to $920,000. Average sales prices declined marginally in the 905 Region (less than 1%).
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for home buyers. This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025,” said TRREB Chief Market Analyst Jason Mercer.
The average sale price for detached properties in the City of Toronto came in at $1,778,855, an increase of 4.4%, while semi-detached properties came in at $1,315,547, an increase of 3.3% compared to October last year.
Condominium apartment sales saw also saw a notable improvement in October, though not as pronounced as other sectors of the resale market. Across the GTA, condo sales rose by 33.4% year-over-year, compared to nearly a 50% increase for ground-level properties (detached, semi-detached, and townhomes). This surge in condo activity was likely influenced by a continued decline in average sale prices. In the City of Toronto, sales climbed by 32%, yet the average sale price decreased by 1% to $721,366. The average price of condo apartments in the whole GTA increased 1.7% from the previous month to $694,038, which is 2.1% lower than a year ago. By the end of October, 8,774 condo apartments were available, comprising 35% of the GTA’s total housing inventory.
As we approach the end of 2024 and look ahead to 2025, optimism is growing for the GTA housing market. The recent Bank of Canada’s rate cuts, with another expected in December, are gradually improving affordability. Five-year fixed mortgage rates which are still around 4.5%, continue to impact purchasing power, but the market has shown renewed momentum since October, with early November data suggesting this trend is persisting.
To combat rising affordability as the interest rate drops and supply is eaten up, savvy policies from governments are needed, stresses TRREB CEO John DiMichele.
“TRREB supports the Conservative Party of Canada’s pledge to remove the GST from the purchase of new homes sold for under $1 million as this is an encouraging step towards giving new home buyers desperately needed relief. Enhancing the rebate will not only make homes more affordable, but it will also increase the number of homes built.”
In summary, as interest rates in Canada continue to decline, hesitant buyers may find renewed motivation to enter the market, driving demand. However, the effect on Toronto home prices will depend on how inventory levels adjust. The current elevated inventory is providing buyers with more options and negotiating power, but for sellers, it has meant longer market times—43 days on average in October compared to 32 a year ago—and competitive pricing is key, with a sales-to-list price ratio of 99%. The balance between falling rates, demand, and inventory will play a pivotal role in shaping the market’s trajectory moving forward into 2025.
