Estimated reading time: 3 minutes
The Bank of Canada has implemented its third consecutive interest rate cut of 2024, reducing the overnight rate by 25 basis points to 4.25%.
The decision reflects two major factors:
- Easing inflation: Both headline and core inflation have continued to decrease as anticipated.
- Economic growth: Lower rates are intended to stimulate economic activity and help absorb slack in the economy as inflation moves toward the 2% target.
Trevor Valade, Vice President at LandLord Property & Rental Management, predicts two additional 25-basis-point reductions before the end of 2024, with rates potentially settling around 2.5% in 2025.
While these adjustments may not dramatically change affordability immediately, they are beginning to improve confidence and alter the narrative around the Toronto real estate market. That change in sentiment could play an important role in market stabilization.
Recent Toronto Real Estate Market Statistics
- Home prices: The GTA benchmark home price in August 2024 was $1,082,200, representing a 4.6% decrease year over year. The average sold price was $1,074,425, down approximately 0.7% from the previous year.
- Market conditions: The sales-to-new-listings ratio was 39.7%, indicating market conditions that favoured buyers.
- Sales activity: GTA home sales totalled 4,975 in August 2024, approximately 6% lower than the same month one year earlier, according to the Toronto Regional Real Estate Board .
Expert Insights
Toronto Regional Real Estate Board President Jennifer Pearce noted that lower borrowing costs could improve affordability, particularly for borrowers with variable-rate mortgages, and help bring more first-time buyers back into the market.
TRREB Chief Market Analyst Jason Mercer similarly suggested that buyers could initially benefit from a combination of lower monthly borrowing costs and softer home prices.
Even if demand begins to recover into 2025, the amount of inventory currently available means it may take time for listings to be absorbed.
Valade's outlook is that Fall 2024 will be a period of quiet recalibration, with renewed activity and growth potentially emerging in Spring 2025.
The underlying idea is that confidence matters. As buyers and sellers become more comfortable with the direction of interest rates and the broader economy, transaction activity may begin to normalize.
Fall 2024 Market Update with Trevor Valade
Watch Trevor Valade's Fall 2024 market update for additional context on interest rates, buyer confidence, inventory, and his outlook for Toronto real estate.
Need help with your property?
Tell us what you are considering and our team will help determine the right next step.
Thank you.
Your enquiry has been sent. A member of our team will be in touch shortly.
