Lower borrowing costs, stable prices prompt buyers to re-enter Toronto's housing market
Home sales across the Greater Toronto Area (GTA) surged in October 2024 as lower interest rates from the Bank of Canada encouraged more buyers to enter the market.
The Toronto Regional Real Estate Board (TRREB) reported 6,658 homes sold in October, a 44.4% spike from the 4,611 sales recorded in October 2023.
“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,” said TRREB president Jennifer Pearce. “The positive affordability picture brought about by lower borrowing costs and relatively flat home prices, prompted this improvement in market activity.”
This boost in sales was accompanied by a smaller rise in new listings, which grew by 4.3% year-over-year to 15,328. As a result, market conditions tightened, creating more competition among buyers. Average home prices showed a slight increase of 1.1% compared to last year, reaching $1,135,215, and, on a seasonally adjusted basis, prices also edged up slightly from September.
Despite the renewed buyer activity, the board noted that there’s still a good amount of inventory on the market, giving buyers options and helping to moderate price growth.
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However, Jason Mercer, TRREB’s chief market analyst, warned that as inventory gets absorbed and housing construction lags behind population growth, price pressures could pick up in the coming months.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for home buyers,” Mercer said. “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.”
TRREB CEO John DiMichele also called on policymakers to take further steps to improve housing affordability. He pointed to the Conservative Party of Canada’s plan to eliminate the GST on new homes under $1 million as a meaningful measure that could help ease the financial burden for new homebuyers.
“Given that the average price of a home in less affordable markets such as the GTA and Vancouver is over $1 million, phasing out the rebate between $1 million and $1.5 million, rather than a hard cutoff at $1 million, would address this shortcoming. Provincial consideration should also be given to matching this proposal,” DiMichele said in the report.
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