Rate Cuts Taking Hold In GTA, Home Sales Jump 44% From 2023

The Greater Toronto Area (GTA) housing market experienced a significant boost in October 2024, with home sales climbing by 44% compared to the same time last year. According to the Toronto Regional Real Estate Board (TRREB), the region recorded 6,658 sales last month, reflecting both year-over-year and month-over-month increases. This surge coincides with signs that recent rate cuts by the Bank of Canada are encouraging buyers to re-enter the market after a period of cautious activity.

Detached homes led the way with over 3,100 sales in October, followed by 1,722 condominium transactions. Other categories, including townhouses and semi-detached homes, also saw notable increases. Experts attribute this growth to the downward trend in mortgage rates, with medium-term fixed rates becoming more affordable. Additionally, strong population growth and government incentives aimed at accelerating housing construction are further bolstering market demand.

Despite rising sales, the supply side remains tight. New listings saw a modest 5% increase compared to October 2023, not enough to keep pace with buyer demand. This imbalance continues to put upward pressure on prices, though affordability has slightly improved compared to last year when rates were higher. TRREB noted that the federal government's efforts to address housing shortages and reward cities exceeding building targets could gradually ease supply constraints.

Market analysts suggest that the pause in interest rate hikes is a turning point for the housing sector. With borrowing costs stabilizing, hesitant buyers are more confident about making purchases. However, affordability challenges linger, especially for first-time homebuyers, as home prices remain high relative to income levels.

Looking ahead, TRREB predicts that lower borrowing costs and ongoing population growth will sustain demand in the coming months. Policymakers continue to emphasize the need for faster housing construction to keep pace with demographic changes. Meanwhile, cities like Toronto are stepping up their efforts, securing provincial funding to expedite building projects.

Overall, the GTA housing market's revival underscores the influence of monetary policy on real estate activity. While challenges remain, the recent uptick in sales offers a glimmer of hope for a more balanced and accessible housing market.