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Oh 2024. You were supposed to be the belle of the ball. The great rebound after nearly a year of 5% interest rates. Relief was in sight. Rather than shifting into a buying spree the market hit a holding pattern. The GTA saw only 64,277 sales as of November and won’t come close to the 77,000 forecasted by the Toronto Regional Real Estate Board.
So what happened?
The reality, given all we faced in 2024, the Greater Toronto Area (GTA) real estate market demonstrated a lot of resilience. Let’s dive into the highlights of the year, exploring key trends, challenges, and what’s next for buyers and sellers.
Did the GTA Real Estate Market Bounce Back in 2024?
Yes, but it wasn’t a straight path. After a challenging 2023, where sales dipped significantly, 2024 saw signs of recovery, particularly in the latter half. Home prices in November 2024 climbed to an average of $1,106,050—a 2.6% year-over-year increase. This growth, coupled with improving buyer sentiment, marked the beginning of a rebound. However, with sales coming in under 66,000 (short of the Toronto Regional Real Estate Board’s 77,000 forecast), it’s clear the recovery wasn’t uniform across all market segments.
Was It a Buyers’, Sellers’, or Balanced Market?
2024 was predominantly a balanced market, with inventory levels fluctuating between three and four months’ supply throughout the year. This balance gave buyers greater negotiating power compared to the pandemic-driven frenzy of years past. Buyers could secure financing and inspection clauses more frequently, a shift from the high-pressure sales environment of 2022.
That said, sellers faced challenges aligning with buyer expectations, often resulting in terminated listings. The GTA saw just over 50,000 listings terminate*. To put that in perspective in 2021, there were over 121,000 sales and under 32,000 listings terminated.
Where Are Prices Relative to the Start of the Year and the 2022 Peak?
Start of 2024: Prices ended the year higher than where they began, thanks to renewed market activity fueled by interest rate cuts and steady inflation declines.
2022 Peak: Prices remain below the market peak of early 2022, but the gap is narrowing, with late-2024 sales showing momentum as borrowing costs eased.
What Drove Market Activity in 2024?
Several factors shaped the 2024 market:
Interest Rate Cuts: The Bank of Canada’s five consecutive rate cuts (totaling 175 basis points) played a pivotal role. Declining interest rates spurred some buyers to act while others stood pat waiting for rates to go even lower. By year-end, the overnight rate dropped to 3.25%, significantly reducing borrowing costs for buyers (especially those looking for a variable rate).
Inventory Dynamics: Increased inventory meant buyers had more choice and less urgency to come to the offer table. Despite this sellers held their ground and demanded market value for their homes.
Easing Inflation: Inflation steadily declined, reaching 2.0% by November, which bolstered consumer confidence.
Stalemate Breaking: By mid-fall, a stalemate between hesitant buyers and hopeful sellers began to shift, reigniting transactions.
What Can We Expect in 2025?
Looking ahead, expect a cautious yet optimistic market:
More Rate Relief: With further mortgage renewals and easing amortization challenges, buyers may find opportunities to re-enter the market.
Gradual Price Growth: Prices are likely to continue recovering, particularly in high-demand areas like Durham Region.
Policy Impacts: New federal programs supporting secondary suites and the removal of the stress test for certain mortgage switches and easing of rules for first-time buyers and uninsured mortgages could boost market activity.
Most experts predict the 2025 Spring Market will be busier than we’ve seen the last 2 years.
Key Takeaway
For both buyers and sellers, understanding market trends and working with a knowledgeable team is critical. The Jim Stanton Real Estate Team prides itself on guiding clients through these complexities with trust, integrity, and proven expertise. Whether you’re navigating today’s opportunities or planning for tomorrow, we’re here to help.
Ready to discuss your goals for 2025? Let’s connect!
