Analysts highlight a shift in the housing market
Greater Toronto Area (GTA) home sales dipped slightly in December, closing out a year marked by modest recovery as buyers capitalized on favourable market conditions. The Toronto Regional Real Estate Board (TRREB) reported 3,359 homes were sold last month, a 1.8% decline compared to December 2023, reflecting a cooling trend following significant rebounds in prior months.
December’s slowdown capped a “transitionary” year for the GTA housing market, a report from the Canadian Press highlighted. While total sales for 2024 rose 2.6% to 67,610 homes, the year remained comparable to the sluggish activity levels of 2001, despite a gradual market recovery. Scott Ingram, a Century 21 Regal Realty sales representative, attributed the dip to fluctuating buyer sentiment and an overheated market cooling faster than anticipated.
Ingram noted that when “things get crazy overheated,” the market could cool down faster than expected based on public sentiment.
Market dynamics and pricing trends
In December, the average selling price across all home types fell 1.6% year-over-year to $1,067,186. The composite benchmark price rose by less than 1%, signalling minimal growth. Meanwhile, new listings surged by 20.2% to 4,681.
TRREB president Elechia Barry-Sproule noted that affordability challenges stemming from high borrowing costs persisted throughout the year. “High interest rates presented significant affordability hurdles and kept home sales well below the norm,” Barry-Sproule said. She added that rate cuts by the Bank of Canada in late 2024, including a half-percentage point reduction in December, offered some relief, with further cuts anticipated in 2025.
Segment performance
Sales of semi-detached and detached homes declined by 9.3% and 5.8%, respectively, while townhouses and condos saw modest gains, increasing by 5.8% and 2.3%. Single-family homes remained in demand, but condos experienced notable price declines due to oversupply, as an influx of new units came onto the market.
Jason Mercer, TRREB’s chief market analyst, highlighted that cautious first-time buyers played a significant role in shaping the market. “The lack of first-time buyers impacted the less-expensive condo segment more so than the single-family segments,” he said.
Outlook for 2025
Despite the challenges, there is optimism for a stronger market in 2025. Ingram pointed to lower interest rates at the start of 2025 compared to the previous year as a factor likely to boost buyer confidence.
Barry-Sproule echoed this sentiment, predicting improved market conditions if borrowing costs continue to fall and home prices remain below historic peaks. However, Mercer cautioned that the condo market’s oversupply will require time to balance out before achieving stability.
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