Toronto Real Estate Market Update: December 2024

As we conclude 2024, Toronto's real estate market exhibits notable trends(that potential buyers and sellers should consider) influenced by recent economic developments, particularly changes in the Bank of Canada's key interest rate.

Average Home Prices

The average selling price for homes in Toronto is approximately $1,027,966, reflecting a 1.2% increase compared to the same period in 2023. This growth is particularly notable in the detached home segment, which has experienced price appreciation above the rate of inflation, especially within the City of Toronto.

New Listings and Sales Activity

In the past 28 days, there have been 1,967 new property listings, with 1,372 homes sold. The median time a property remains on the market is 34 days, indicating a steady pace in buyer activity.

Market Dynamics by Property Type

• Detached Homes: The average price is $1.6 million, showing a 2% decrease from the previous year. Notably, 5-bedroom detached homes have experienced a significant price increase of 30%, reaching $3.5 million.
• Townhouses: The average price stands at $1.1 million, a slight 1% decrease year-over-year. Sales activity has risen, with a 34% increase in sold listings compared to the same period last year.
• Condominiums: The average price is $713,000, marking a 1% decrease from the previous year. Two-bedroom condos have appreciated by 5%, now averaging $837,000. Buyers in this segment benefit from increased inventory and greater negotiating power, making it an attractive option for those entering the housing market.

Impact of Interest Rate Changes

On December 11, 2024, the Bank of Canada reduced its policy interest rate by 50 basis points to 3.25%, marking the second consecutive half-point cut aimed at stimulating economic growth amid a weakening economic outlook.

This reduction in the key interest rate is expected to lower borrowing costs, potentially increasing buyer demand in the housing market. However, the full impact on Toronto's real estate market may take time to materialize, as buyers and sellers adjust to the new economic conditions.

Market Outlook

Homes are selling at approximately 98% of their listing prices, suggesting a balanced market where buyers and sellers are negotiating effectively. With selling prices remaining below historic peaks and mortgage payments trending lower, the stage is set for an accelerating market recovery in 2025. The combination of increased sales activity, rising average prices, and favorable borrowing conditions suggests a positive trajectory for Toronto's real estate market in the coming

Among 23 cities in the Greater Toronto Area, Toronto ranks as the 15th most expensive, 12th in price growth, and 11th in fastest sales. This positions Toronto in the mid-range across various market indicators within the region.

Conclusion

Toronto's real estate market has demonstrated resilience and adaptability in 2024 and remains robust as of December 2024, with moderate price increases and consistent sales activity. The recent interest rate cuts by the Bank of Canada have been instrumental in this recovery, making homeownership more attainable for many. These cuts may influence future market dynamics, potentially affecting buyer behavior and housing demand.

The market exhibits variations across different property types and neighbourhoods, underscoring the importance for buyers and sellers to stay informed about current trends and economic factors influencing the market as they navigate this dynamic landscape.