Resurgent Demand in the GTA Housing Market: What You Need to Know

The Greater Toronto Area (GTA) housing market displayed a notable resurgence in November 2024, thanks to key policy shifts and evolving buyer dynamics. Let's dive into the highlights and what they mean for buyers, sellers, and investors.

Key Market Highlights

1. Interest Rates Drive Renewed Demand: The Bank of Canada's interest rate cut to a two-year low of 3.75% has energized the market. Buyers previously sitting on the sidelines are re-entering, while price stabilization boosts confidence.

2. Sales Momentum Surges: November saw a 40% year-over-year increase in resale activity, marking a three-year high for November. This rebound highlights the significant pent-up demand being unleashed in response to lower interest rates.

This chart illustrates the resurgence in GTA sales activity, showing the highest November sales in three years.

3. Balanced Market Conditions: The ratio of sales-to-new listings reached 51%, the highest this year. Coupled with a steady 3.7 months of inventory, the GTA now enjoys balanced conditions—a sweet spot where neither buyers nor sellers dominate.

The sales-to-new listings ratio indicates balanced market conditions, favorable for both buyers and sellers.

4. Price Trends on the Upswing: For the second consecutive month, prices rose, with average resale prices up 2.6% year-over-year to $1.106 million. Notably, detached homes led this growth with a 3.5% price increase.

A comparison of price trends by housing type, highlighting the steady recovery in the market.

5. Affordability Rebounds, But for How Long? With condo prices averaging under $600K for nearly half of all sales, first-time buyers and investors have enticing options. However, pending mortgage rule changes in December could reignite price pressures.

Nearly half of all condo sales were under $600K in November 2024, reflecting strong demand in the entry-level segment.

Actionable Insights

• For Buyers: Now is a rare window of opportunity. With stable prices, improving affordability, and ample inventory, this balanced market favors astute buyers.

• For Sellers: This is a good time to prepare for the spring market, as sustained demand growth and supply constraints are likely to tilt conditions in favor of sellers in the coming months.

• For Investors: The condo market remains an attractive entry point, especially units priced under $600K. However, with increasing completions projected for next year, due diligence is critical to avoid oversupply risks.

Final Thoughts

The GTA housing market is shifting towards growth and balance after a challenging period. Whether you're considering buying, selling, or investing, this is a moment to act strategically. As market dynamics evolve, staying informed will be the key to success.