Toronto home sales dip in December to cap 'transitionary' year

In December 2024, home sales in the Greater Toronto Area (GTA) fell by 18.7% from November, reaching a five-month low with 5,359 units sold. This decline ended a four-month streak of rising sales that began after the Bank of Canada reduced its benchmark interest rate in June. Compared to December 2023, sales were down by 6.8%.

The Toronto Regional Real Estate Board (TRREB) reported that the average selling price in December was $1,067,186, a 1.6% decrease from the same month in 2023. Despite this, the composite benchmark price, representing a typical home, saw a slight year-over-year increase of less than 1%, reaching $1,094,000.

Throughout 2024, the GTA housing market experienced modest growth. Total home sales rose by 2.6% to 67,610 units, while new listings increased by 16.4% to 166,121. This surge in listings provided buyers with more options, contributing to a 0.8% decline in the average selling price for the year, bringing it to $1,117,600.

High borrowing costs were a significant factor influencing buyer behavior in 2024. TRREB President Elechia Barry-Sproule noted that elevated interest rates created affordability challenges, keeping home sales below typical levels. The Bank of Canada's interest rate cuts in the latter half of the year offered some relief, but many potential buyers remained cautious.

The market dynamics varied across different housing types. Sales of semi-detached and detached homes decreased by 9.3% and 5.8%, respectively, while townhouse and condominium sales saw modest increases of 5.8% and 2.3%. Condominiums, in particular, faced more noticeable price declines, partly due to an oversupply and high interest rates deterring investors.

Looking ahead, TRREB anticipates that further interest rate reductions in 2025, combined with home prices remaining below their historic peaks, could lead to improved market conditions. However, the ongoing housing affordability crisis, influenced by factors such as high home prices, stagnant wages, and increased demand from immigration, may continue to pose challenges for potential buyers in the GTA.