The Greater Toronto Area (GTA) real estate market experienced significant shifts in 2024, influenced by fluctuating interest rates and market adjustments. Here's a detailed breakdown of the key trends and what they mean for buyers, sellers, and investors moving forward.

2024 Market Overview

Annual home sales in 2024 reached 67,610, reflecting a 2.6% increase from the previous year. New listings surged by 16.4%, creating a buyer-friendly market where the increased inventory kept price hikes in check. The average selling price for homes across all types was $1,117,600, a slight dip compared to $1,126,263 in 2023.

 Key takeaway: While prices held steady in the ground-oriented housing sector, condo apartments saw more significant price adjustments due to decreased demand from first-time buyers impacted by high borrowing costs.

Factors Driving Market Trends

• Interest Rates: Borrowing costs were a major concern in 2024, leading to restrained market activity during the first half of the year. However, two back-to-back Bank of Canada rate cuts in the latter half of 2024 positively impacted buyer sentiment.
• Segment-Specific Performance: Detached home sales increased, whereas condo apartment sales decreased as many first-time buyers awaited further interest rate relief in 2025.

December 2024 Market Snapshot

In December, there were 3,359 home sales, down slightly year-over-year, with new listings continuing their upward trend. The MLS® Home Price Index rose by less than 1%, while the average home price reached $1,067,186, indicating a balanced yet slightly softening market.

Outlook for 2025

The market is poised for a rebound with potential interest rate cuts in 2025 and prices remaining below historic peaks. Improved affordability may bring hesitant first-time buyers back into the market.

As noted by the TRREB President Elechia Barry-Sproule, key government policies related to monetary policy and housing development will play a crucial role in shaping 2025’s real estate landscape.

November saw Toronto’s housing market regain some momentum, with sales improving, but with some complexities.

Home Sales Show Gains

Seasonally adjusted home sales in Toronto rose by 1.9% month-over-month (m/m) in November. However, October’s figures were revised downward by 1%, making November’s gains appear slightly stronger than they truly were. Despite this adjustment, sales remain up by an impressive 39% compared to November last year. Detached home sales in the 416 area showed particularly robust growth, nearly 50% higher year-over-year (y/y).

Over the past two months, the sales trend has shown notable improvements in both the condo and single-family home segments. However, demand overall remains subdued compared to the historical averages from the past decade, though conditions have improved since the summer.

Source: Edge Realty Analytics

New Listings Rise

New listings across the Greater Toronto Area (GTA) rose by 4.4% m/m and 10% y/y in November, making it the busiest November for new listings since 2017. According to an Edge Realty Analytics report, as sales gradually recover, there remains uncertainty regarding how much new supply will enter the market. Elevated supply could temper typical price growth that might otherwise result from increasing sales. The report anticipates that listing levels will remain above average through 2025.

Source: Edge Realty Analytics

Inventory 

Active listings in the GTA were up 30% y/y. After reaching 15-year highs in inventory in September and October, single-family home supply dipped slightly below 2017 levels in November. The condo segment continues to face record-high inventory levels.

Market Conditions 

Supply outpaced sales in November, leading to a weakening in market balance, as noted in the report. The sales-to-new-listings ratio slipped to 43% from 45% in the prior month, keeping it close to historic lows.

Source: Edge Realty Analytics

Despite this, months of inventory showed slight improvement, dropping below 2023 levels for both condos and single-family homes.

Source: Edge Realty Analytics

Prices See Mixed Movement

The MLS House Price Index recorded an 0.8% m/m increase in November, marking the strongest monthly rise since mid-2022; however, seasonally adjusted average prices fell by 0.6% m/m. This is notable, given the supply and demand balance, and should be monitored, according to the report.

Housing Starts Decline

Housing starts in the GTA dropped significantly, down 33% y/y in October across all housing types. As of now, there are approximately 102,000 dwellings under construction across the GTA. If housing starts continue to slow while project completions accelerate, the total number of dwellings in the pipeline is likely to decrease. Nearly 75% of the units under construction are condos, indicating that the condo market will likely remain well-supplied through 2025 and into 2026.