Toronto’s Fall 2024 Real Estate Outlook: Key Trends and What to Expect
The Bank of Canada has implemented its third consecutive interest rate cut this year, reducing the overnight rate by 25 basis points to 4.25%. This decision is driven by two main factors:
- Easing Inflation: Both headline and core inflation are continuing to decrease as anticipated.
- Economic Growth: The aim is to stimulate economic growth to absorb slack in the economy, helping inflation sustainably reach the 2% target.
Trevor Valade, Vice President at LandLord Property & Rental Management, predicts two more 25 basis point reductions before the year’s end, with rates potentially settling around 2.5% by 2025. While these adjustments might not drastically impact individuals immediately, they are boosting confidence and altering the narrative in the Toronto real estate market. This shift in perception is crucial for market stabilization and long-term affordability improvements.
Recent Market Statistics
- Home Prices: The benchmark home price in the Greater Toronto Area (GTA) for August 2024 was $1,082,200, marking a 4.6% decrease year-over-year. The average home sold price was $1,074,425, a 0.7% decrease from the previous year, according to the Toronto Housing Market report.
- Market Conditions: The sales-to-new-listings ratio (SNLR) was 39.7%, indicating a buyer’s market in the Toronto real estate market.
- Sales Data: Home sales in the GTA totaled 4,975 in August 2024, a 6% decrease compared to the previous year, as reported by the Toronto Regional Real Estate Board (TRREB).
Expert Insights
Jennifer Pearce, President of the Toronto Regional Real Estate Board, notes, “The Bank of Canada’s rate cut will lead to a further improvement in affordability, especially for those using variable rate mortgages. As mortgage rates continue to trend lower, we should experience an uptick in first-time buying activity, including in the condo market within the Toronto real estate market.”
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TRREB Chief Market Analyst Jason Mercer adds, “As borrowing costs trend lower over the next year-and-a-half, home buyers will initially benefit from both lower monthly mortgage payments and lower home prices. Even as demand picks up, especially in 2025, it will take time for the inventory of listings to be absorbed in the Toronto real estate market.”
Valade suggests that while the fall will be a period of quiet recalibration, the Toronto real estate market will likely see renewed activity and growth in spring 2025. The collective belief in a stabilizing market is expected to encourage transactions with increased confidence.
Minute Fall Market Update with Trevor Valade
Watch the video below for Trevor Valade’s insights and predictions on the Toronto real estate market:
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