Toronto home sales rise as lower interest rates bring buyers back to market

Home sales in the Greater Toronto Area (GTA) have been on the rise for four consecutive months, reaching a one-year high in November. This upward trend is largely due to lower borrowing costs, which have encouraged buyers to re-enter the market.

According to the Toronto Regional Real Estate Board (TRREB), seasonally adjusted sales increased by 1.9% in November compared to October, totaling 6,450 units. This marks a significant 40% increase from the same month the previous year. The GTA, which includes Toronto and its surrounding municipalities, is a key indicator of Canada's real estate trends.

TRREB President Jennifer Pearce noted that many home buyers had been waiting for reduced inflation and lower borrowing costs before making a purchase. The Bank of Canada has cut its benchmark interest rate by 1.25 percentage points since June, bringing it down to 3.75%, with further reductions anticipated. This decrease in interest rates has made mortgages more affordable, prompting increased market activity.

The Home Price Index, which reflects the value of typical homes, rose by 0.8% to CAD 1,094,100 in November, reaching its highest level since the same month last year. Additionally, new listings saw a 4.4% increase from October and a 14.4% rise year-over-year, indicating a growing supply to meet the heightened demand.

Experts suggest that with selling prices still below their historic peak and monthly mortgage payments becoming more manageable, the stage is set for a continued market recovery into 2025. The combination of lower interest rates and increased inventory is expected to sustain buyer interest in the coming months.

As the year concludes, the Toronto housing market appears to be rebounding, offering opportunities for both buyers and sellers. The ongoing decline in borrowing costs and a steady increase in listings suggest a balanced market environment as we move into the new year.