GTA Housing Market Becomes More Affordable Following Rate Cut
TORONTO, ONTARIO, September 5, 2024 – The Greater Toronto Area (GTA) housing market saw a slight decline in home sales year-over-year for August 2024, while new listings rose modestly over the same period. Although the market remained well-supplied, the average home price saw only a minor decrease compared to August 2023.
“The Bank of Canada’s rate cut on September 4 will further improve affordability, particularly for those with variable-rate mortgages. First-time homebuyers, who are especially sensitive to changes in borrowing costs, are likely to benefit. As mortgage rates continue to trend lower this year and into the next, we expect an increase in first-time buying activity, especially in the condo market,” said Jennifer Pearce, President of the Toronto Regional Real Estate Board (TRREB).
GTA REALTORS® recorded 4,975 home sales through TRREB’s MLS® System in August 2024, down by 5.3% compared to 5,251 sales in August 2023. New listings totaled 12,547, up 1.5% year-over-year. On a seasonally adjusted basis, sales in August increased slightly compared to July, while new listings saw a small decline month-over-month.
The MLS® Home Price Index (HPI) Composite benchmark fell by 4.6% year-over-year in August 2024. Meanwhile, the average selling price decreased by a smaller margin of 0.8% compared to August 2023, reaching $1,074,425. This difference in price changes is attributed to an increase in the share of detached home sales compared to last year. On a seasonally adjusted basis, the average selling price edged down slightly from July.
“As borrowing costs decrease over the next 18 months, homebuyers will benefit from both lower monthly mortgage payments and slightly reduced home prices. Even as demand picks up, particularly in 2025, it will take some time for the current inventory of listings to be absorbed. Ample supply in the market will help keep price growth moderate during the early stages of recovery,” said Jason Mercer, TRREB Chief Market Analyst.
TRREB CEO John DiMichele emphasized the importance of maintaining a focus on new home construction, especially to ensure the right mix of home types to meet consumer needs. “Today’s higher listing inventory will eventually decrease. New housing needs to be affordable, and municipalities can help by reducing development charges that are ultimately passed on to home buyers. If people can’t find affordable housing in the GTA or surrounding Greater Golden Horseshoe, they will move elsewhere, potentially even outside Ontario or Canada. Housing is a key driver of our region’s economic development,” said DiMichele.
