The Greater Toronto Area real estate market is beginning to show signs of renewed energy, though the picture remains uncertain.
According to the Toronto Regional Real Estate Board’s latest Market Watch report, a 40.1 per cent year-over-year increase in home sales stands out as a strong indicator of recovery. Yet, beneath this figure lies a market characterized by uneven pricing trends, modest growth in new listings and cautious engagement from both buyers and sellers.
These patterns reflect a market in transition, one gradually moving away from the volatility of recent years—driven by inflation and elevated borrowing costs—and taking its initial steps toward full stability.
Sales and supply: Context matters
The 40.1 per cent jump in sales year-over-year is one of the standout highlights of the report. This figure reflects buyers reentering the market after a prolonged wait-and-watch period caused by high interest rates and economic uncertainty. The uptick is promising but should be viewed in context: November 2023 was an unusually slow month for sales, amplifying the perceived growth.
On the supply side, new listings rose by 6.6 per cent, a rate much slower than the pace of sales. This disparity has contributed to tighter market conditions, with buyers vying for a limited pool of properties. Meanwhile, active listings surged by 30.2 per cent year-over-year, providing some relief for prospective buyers and indicating that sellers are becoming more flexible, likely due to changing market dynamics.
The sales-to-new-listings ratio, sitting at 41 per cent, suggests the market is balanced. This ratio signifies that while sales have increased significantly, the increase in new listings, though modest, has kept the market from overheating, in spite of government policy designed to give more buying power to first-time buyers. Buyers have options, but the relative scarcity of new supply ensures sellers remain in a favourable position in certain property segments, such as single-family homes.
Pricing trends: Stability with regional nuances
The average home price in the GTA increased by 2.6 per cent year-over-year, reaching just over $1.1-million. This modest growth aligns with inflation, providing a welcome sign of stability in a market that has experienced significant fluctuations in recent years. Unlike the rapid price escalations of the past, this measured pace supports a sustainable housing market, appealing to both buyers and sellers.
However, pricing dynamics differ greatly by region and property type, reflecting localized trends:
- Detached homes in the 416: A 5.9 per cent price increase highlights the strong demand for single-family properties in central Toronto, driven by limited inventory and buyer preferences for space and privacy.
- 905 condos: Prices fell by 7.6 per cent, underscoring the affordability challenges condo sellers face in suburban areas. This trend reflects buyers’ ability to negotiate more favourable deals.
- 416 townhouses: Experiencing a 6.1 per cent price decrease, this segment reveals a softer demand, potentially due to competition from more affordable condo units.
These variations showcase a multifaceted market, where affordability, location, and property type significantly influence buying decisions.
A deliberate shift in buyer and seller behaviour
A major shift in market behaviour is evident in the 24 per cent increase in the average days on market compared to last year. This longer timeline reflects a more deliberate approach by buyers, who now take their time exploring available options instead of rushing to close deals. This reduced urgency can be attributed to stabilized borrowing costs and the increased inventory of active listings, allowing for greater choice.
Sellers, too, have adapted. Instead of re-listing properties to create urgency—a common practice in hotter markets—many are keeping homes listed for longer, aligning with a more measured market environment. These shifts indicate a market gradually finding equilibrium, where negotiations are less speculative and more thoughtful.
Foundations for recovery in 2025
The outlook for the GTA housing market in 2025 is cautiously optimistic. According to TRREB President Jennifer Pearce, lower borrowing costs, a steady supply of active listings, and prices remaining below historic peaks are all factors that support a more sustainable recovery. This environment benefits both buyers and sellers, fostering a balanced market where fair pricing and increased negotiation power create opportunities for all parties.
However, external factors such as continued population growth, and potential policy changes will shape the pace and scale of recovery. Economic uncertainty and geopolitical events could influence borrowing rates and housing affordability, underscoring the need for ongoing market adaptability.
Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.
Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.
