After six months of sluggish activity, Toronto’s housing market is showing clear signs of recovery. October saw a significant uptick in sales, with a year-over-year increase of 44% for low-rise homes and 32% for condominiums. While last year’s sales volumes were near 20-year lows, this growth indicates that the GTA market is truly heating up.
Key numbers from October 2024
GTA Sales Surge: Home sales jumped 44.4% year-over-year and 33% month-over-month. Buyers are taking advantage of the Bank of Canada’s jumbo rate cuts, which have boosted affordability through lower borrowing costs, high inventory levels and stable prices.
Mississauga: Sales in Mississauga rose by 27.4%, with detached home prices soaring by 10.2%. The months of inventory (MOI) fell below 2 months for both semi-detached and freehold townhouses, highlighting strong demand.
Market Conditions: Although these gains appear strong, it’s crucial to remember that last year’s sales were exceptionally low, so part of the increase reflects a return to normal levels. The MOI now stands at 3.2 for low-rise houses and 5 for condos, signaling a tightening market.
What’s Driving the Market Uptick?
The recent rate cuts from the Bank of Canada have sparked buyer interest, drawing many off the sidelines. Buyers are also anticipating an even busier market in spring 2025, driven by expectations of further rate reductions and recent federal policy announcements to insured mortgages.
With lower borrowing costs, many see this period as a valuable opportunity, prompting them to act now to get ahead of the market with higher prices and increased competition.
Investor Sentiment Shifts: What it Means for the GTA Market
Investors have long played a significant role in Toronto’s pre-construction condo market, but recently, the landscape has shifted. With soaring pre-construction prices and federal decisions to curb immigration targets, investors are pausing, reassessing, and many are offloading properties. The era of pre-construction as a surefire investment has cooled, with fewer willing to pay high prices for uncertain returns.
A large part of this shift is tied to reduced population growth expectations, weakening demand for rental in the condo market. With fewer new residents, the tenant pool shrinks, decreasing rental yields and making pre-construction and condos in general less attractive. The recent increase in rental listings and softening rental prices confirm this trend, signaling that investors are taking a cautious approach.
Outlook
Toronto’s housing market faces multiple uncertainties, including economic shifts, demographic changes, and interest rate adjustments. With Trump’s presidency and potential changes to tariffs, this could further add economic pressures, potentially affecting everything from trade flows to inflation and interest rates.
In these changing times, success requires thinking beyond immediate returns and building a resilient portfolio that aligns with long-term housing needs. A thoughtful, well-informed strategy is essential for making smart investment decisions that pay off in the years to come. Together, we can develop a plan to help you navigate these shifts confidently.
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