Cooler weather brings warmer results for home sales as buyers return to the market
The Greater Toronto Area (GTA) housing market might finally be picking up steam again, as new data from the Toronto Regional Real Estate Board (TRREB) showed encouraging increase in home sales and listings in September.
Home sales rose by 8.5% year over year, while listings jumped 10.5%, raising questions about whether this could signal a broader market rebound.
TRREB reported a total of 4,996 home sales, a noticeable rise from the same month in 2023. Meanwhile, the number of new listings climbed to 18,089, which has added some much-needed inventory to a market that’s been marked by scarcity.
“The annual improvement in September home sales was more than matched by the increase in new listings over the same period,” said Jason Mercer, chief market analyst at TRREB. “This resulted in a better-supplied market and increased negotiating power for buyers re-entering the market.”
Mercer noted that the boost in listings is creating a better-supplied market, especially in more affordable segments like condos and town homes.
“The ability to negotiate on price, led to moderate year-over-year price declines, particularly in the more affordable condo apartment and townhouse segments, which are popular with first-time buyers,” he said.
The MLS Home Price Index Composite benchmark was down 4.6% from September 2023. The average home price stood at $1,107,291, a slight 1% decrease from last year but up slightly from August.
RATESDOTCA’s mortgage expert Victor Tran said that several recent developments are helping to spur the market, including the US Federal Reserve’s 50-basis-point rate cut, which influenced Canadian fixed mortgage rates.
“We’ve seen a few key events that are moving the needle in the GTA housing market,” Tran said. “The US Fed decrease of 50 basis points encouraged lenders to lower fixed mortgage rates, the raised cap on insured mortgages to $1.5 million, three consecutive overnight rate decreases from the Bank of Canada – all of these combined appear to be shaking the market out of the rut it’s been in for most of this year. The increase in listings means that homebuyers will have more choice as we move into the fall season.”
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The outlook could get even brighter if interest rates continue to fall through the rest of the year, Tran added, predicting that this could lead to a rare winter surge in activity.
“We can expect to see home sales increase over the coming months, and with that, likely an uptick in home prices,” he said. “If the Bank of Canada continues to lower the overnight rate throughout the rest of the year, we may also see an unseasonably strong winter market as the market catches up with pent-up demand.”
“As buyers take advantage of changes to mortgage lending guidelines and borrowing costs trend lower, home sales will steadily increase in relation to population growth. With every rate cut, a growing number of GTA households will afford a long-term investment in home ownership, including first-time buyers,” added TRREB president Jennifer Pearce.
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