Toronto Real Estate Market Insights: November 2024 Review

As 2024 draws to a close, the Greater Toronto Area (GTA) real estate market has shown marked improvement, fueled by a favorable lending environment and growing buyer confidence. In November, home sales surged by 40%, and while new listings also rose, the growth was more modest compared to previous years. The result: tighter market conditions, particularly for single-family homes, and a slight uptick in average prices. With interest rates steadily decreasing, the stage is set for a more robust market recovery heading into 2025.

Real Estate Market Activity

In November 2024, the Toronto Regional Real Estate Board (TRREB) reported 5,875 home sales, reflecting a 40.1% increase year-over-year. This surge in activity was driven by the Bank of Canada’s continued rate cuts, which have made borrowing more affordable and encouraged many buyers to re-enter the market. The average selling price for homes across all categories rose by 2.6% to $1,106,050 compared to November 2023, with single-family homes leading the price increases.

New listings also saw a year-over-year increase, up 6.6% from November 2023, but the pace of new inventory remained slower compared to past years. This slow growth in new listings has contributed to a tightening market, especially for detached homes, which have experienced price increases above the rate of inflation. On the other end of the spectrum, the condominium apartment market has continued to see lower average prices, offering buyers more negotiating power. This dynamic has made condos an appealing option for those transitioning from renting to homeownership.

Supply and Demand Dynamics

The GTA housing market is experiencing a shift toward tighter conditions, particularly in the detached home segment. While there has been an increase in listings, the growth in inventory has not kept pace with the rise in buyer demand, leading to upward pressure on prices. The detached market, in particular, has seen significant price growth, especially in the City of Toronto, where demand has outpaced supply, creating a more competitive environment for buyers.

Condominium prices, however, continue to face downward pressure, with average prices falling by 2.5% year-over-year. This presents a unique opportunity for buyers in the condo market, where there is an abundance of choice, allowing for negotiation leverage. As borrowing costs decrease further, more renters are likely to transition to homeownership, driving demand in the condo market.

The rental market is also expected to remain relatively stable as population growth is expected to keep rental demand high, with landlords benefiting from a more balanced market, especially as delays in the Landlord and Tenant Board (LTB) are addressed.

What’s Next for the GTA Market?

Looking ahead, the GTA real estate market is poised for continued recovery, with analysts forecasting that conditions will remain favorable for buyers in the short-term. The key drivers for 2025 will likely be lower interest rates, which have eased mortgage payments and made homeownership more attainable for many. As the housing market stabilizes, however, price growth may accelerate, particularly if inventory remains tight and demand continues to rise.

The condo market may see renewed interest as affordability remains a key concern for many potential buyers. With increased choice and more favorable financing conditions, condos are likely to attract a wider pool of buyers, including those previously priced out of the detached home market. As a result, the condo market could experience moderate price growth as we head into the new year.

On the supply side, there remains a critical need for more single-family homes, especially in urban centers like Toronto. A shortage of new-build detached homes combined with steady population growth has created a supply-demand imbalance, which will likely drive prices higher in this segment in the coming months.

Strategic Opportunities for Investors

The current market presents a range of strategic opportunities. The continued low interest rates and the ongoing shift toward homeownership create ideal conditions for long-term investment. Areas with increasing demand for family-friendly housing or strong potential for infrastructure development should be top of mind for those looking to capitalize on future growth.

Single-family and multi-family homes, particularly detached properties, remain a strong investment as inventory remains limited. These homes are expected to see further price increases, especially in sought-after neighborhoods. Meanwhile, condominiums represent an opportunity for investors looking for properties with stable demand but more affordable price points. The condo market's affordability, coupled with greater negotiating power, makes it an appealing entry point for investors seeking rental income or long-term capital appreciation.

Source: TRREB - Market Watch