SOME CHANGES IN THE RIGHT DIRECTION – WHAT HAPPENED IN TORONTO’S OCTOBER REAL ESTATE MARKET?

The Greater Toronto Area (GTA) saw a significant increase in home sales in October 2024 compared to the previous year. While new listings also rose, this increase occurred at a slower annual rate, resulting in tighter market conditions compared to October 2023. The average selling price experienced a slight annual increase, indicating a more dynamic market.

As the Bank of Canada continues its rate-cutting cycle, it is encouraging to see more buyers returning to the market in October. Improved affordability, driven by lower borrowing costs and relatively stable home prices, has contributed to this resurgence in market activity.

According to GTA REALTORS®, there were 6,658 home sales recorded through TRREB’s MLS® System in October 2024, representing a significant rise of 44.4% compared to the 4,611 sales reported in October 2023. New listings totaled 15,328, which is a 4.3% increase year-over-year. Month-over-month, on a seasonally adjusted basis, October sales also rose compared to September. The MLS® Home Price Index Composite benchmark decreased by 3.3% year-over-year in October 2024, while the average selling price saw a modest increase of 1.1% from October 2023, reaching $1,135,215. Notably, the average selling price also rose on a seasonally adjusted basis when compared to September.

Although market conditions tightened in October, buyers still have plenty of inventory and options available. This variety is likely to support moderate growth in home prices in the coming months. However, as inventory decreases and home construction struggles to keep up with population growth, we can expect an increase in selling price growth, especially as we head into the spring of 2025.

To further enhance affordability, policymakers have the opportunity to reduce taxes for home buyers. TRREB supports the Conservative Party of Canada’s proposal to eliminate the GST on new homes priced under $1 million. This initiative could provide significant relief to new home buyers and promote a stronger housing market.

Additionally, expanding the rebate to cover homes priced between $1 million and $1.5 million would address affordability concerns in the GTA and Vancouver, rather than imposing a strict cut-off at $1 million. Provincial support for this proposal would also be beneficial.