Toronto home sales jump as October rate cut marked turning point for market: expert

In October 2024, Toronto's housing market experienced a significant boost, with home sales rising by 14% compared to September, marking the largest monthly increase since December of the previous year. This surge resulted in 6,390 units sold, up from 5,707 in September.

The uptick in sales is largely attributed to the Bank of Canada's series of interest rate cuts, which began in June and brought the benchmark rate down to 3.75%. These reductions have made borrowing more affordable, encouraging buyers to re-enter the market. Jennifer Pearce, President of the Toronto Regional Real Estate Board (TRREB), noted that many potential buyers had been waiting for reduced inflation and lower borrowing costs before making their purchases.

Despite the increase in sales, new listings in October fell by 6.8%, reversing a previous trend of rising listings. This decline in new listings, combined with increased buyer activity, has begun to put upward pressure on home prices. The average home price in Toronto rose by 1.5% to approximately CAD 1.13 million, the highest monthly increase since June.

The positive momentum continued into November, with home sales in the Greater Toronto Area increasing for the fourth consecutive month. Seasonally adjusted sales rose by 1.9% from October, totaling 6,450 units, and marking a 40% increase compared to the same month the previous year. The Home Price Index also climbed by 0.8% to CAD 1,094,100, reaching its highest level since November of the previous year.

Experts suggest that the combination of lower borrowing costs and a limited supply of new listings may continue to drive the market's recovery into 2025. Pearce mentioned that with selling prices remaining below their historic peak and monthly mortgage payments trending lower, the stage is set for an accelerating market recovery in the coming year.

However, potential buyers should remain cautious, as the market dynamics can change rapidly. It's advisable to stay informed about interest rate trends and housing inventory levels to make well-informed decisions in this evolving market.