GTA annual home sales skyrocketed by 44.4 per cent in October, indicating buyers have stepped off the sidelines in response to the Bank of Canada’s four consecutive interest rate cuts.
After a sluggish spring and early fall real estate market, it appears that the central bank’s rate cuts are beginning to have an impact, according to the Toronto Regional Real Estate Board’s (TRREB) October report.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” TRREB president Jennifer Pearce said in a statement.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
New listings increased by 4.3 per cent, a slower pace than previous months, indicating that sellers could be waiting to put their property on the market until activity heats up in the spring, said TRREB chief market analyst Jason Mercer.
“Interest rates trending lower impacts behaviour on the buying and selling side,” he said. “While buyers continue to wait for rates to drop before purchasing, sellers are then waiting to list their home when more buyers enter the market.”
The sales-to-new-listings ratio is now around 43 per cent, indicating a balanced market — anything below 40 per cent is a buyers’ market and anything above 60 per cent is a sellers’ market.
On a seasonally adjusted basis, October sales increased month-over-month compared to September.
Sales across all property types jumped with detached home sales increasing by 46 per cent, semi-detached by 44 per cent, townhouse by 56 per cent and condos by 33.4 per cent.
It indicates a possible change in the condo market, which has been plagued by minimal sales in recent months, resulting in a sharp correction in that segment of the market.
First-time homebuyers, who typically enter the market by purchasing condos, are the most sensitive to interest rate changes and are beginning to purchase units again.
The average selling price was up by 1.1 per cent compared to October 2023 to $1,135,215, and edged up by 1.5 per cent month over month.
While prices were up for detached and semi-detached homes year over year, at 1.2 per cent and 0.7 per cent, respectively, condos and townhomes didn’t see any price gains.
Because there is substantial inventory in the condo segment, buyers still have “a lot of negotiating power,” Mercer said, dampening prices.
While market conditions did tighten in October, there is still a lot of inventory and choice for homebuyers, said Mercer. Active listings increased by 25 per cent, meaning there are still more than 24,400 properties available on the market.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025,” he added.
