The Toronto real estate market in 2024 was challenging, surprising many who expected steady growth and higher sales. Instead, we saw a market that adjusted slowly to interest rate changes, global events, and local economic shifts. Here’s a quick overview of what happened and what’s on the horizon.
2024: A Year of High Interest Rates and Slow Activity
The Bank of Canada (BOC) started 2024 by holding interest rates steady, but global and U.S. economic conditions soon forced adjustments. High borrowing costs impacted buyers, resulting in fewer transactions during the first half of the year. By mid-year, inventory grew, stabilizing prices but reducing urgency in the market.
When the BOC finally began cutting rates in June, the market started to respond. October marked the first significant increase in transaction volume, with November and December continuing the trend. This shows how sensitive the real estate market is to rate changes—adjusting faster to increases than decreases.
What’s Happening Now?
As of late 2024:
- Buyers are returning, encouraged by lower borrowing costs.
- Sellers are becoming more realistic about current home values.
- Detached, semi-detached, and townhomes are seeing the most activity, especially in the $1M–$1.5M price range.
However, condos face challenges due to record-high inventory levels, particularly smaller units in less central locations. Larger suites in prime areas, however, remain in demand.
What’s Next for 2025?
Looking ahead:
- Transaction volumes are expected to increase by 20%, though still below the 10-year average.
- Price growth is likely to follow this rise in activity.
- The condo market will see limited new inventory from 2025 onward, creating potential price pressure in the long term (2028–2030).
Immigration and housing supply remain critical issues, especially with an upcoming federal election. With population growth outpacing new home construction, affordability and availability will remain in focus.
Navigating a Complex Market
The Toronto real estate market is more complex than ever, with information often hard to interpret. I believe informed decisions lead to better results. We rely on top-tier market research to help our clients make the best choices, whether buying or selling.
Remember, patience pays off in real estate. Those who make smart moves today are likely to look back years from now and say, “I should have done more!”
For more personalized insights about your local market, feel free to reach out.
