While the GTA Real Estate market ended 2024 flatter than expected, there is still anticipation of a bounce-back in 2025.
Why?
A trio of rate cuts in the second half of 2024 failed to motivate buyers. Since then, there have been two further cuts of half a percent. As a result, we’re entering 2025 in a much more advantageous position for buyers than just a year ago.
As we move into the new year and potential buyers assess their financial situation, the market, and the more appealing borrowing rates, better purchasing conditions have come into alignment.
But before we move into 2025, let’s look at how 2024 finished with the December numbers:
GTA
After a 2.6% decrease from October to November, the Average Sales Price fell further in December, this time by 3.5% (from $1,106,050 to $1,067,186). This is a common trend among Decembers over the past 25 years, so it was anticipated. Compared to December 2023, last month’s Average Sales Price was down by 1.6% (from $1,084,757).
Regarding what to expect in January and early 2025, I anticipate that we will see a higher Average Sales price than in January 2024 ($1,026,703), and there’s a possibility of returning to over $1.1M sooner than later. The market will have been on a decline or slump for 3 years come February 2022 so it’s about time for some momentum.
Total Sales
As with typical Total Sales numbers from November to December, this figure decreased. November Total Sales of 5,875 fell to 3,359 in December, reflecting a 42.8% decline. Furthermore, the 3,359 is also 1.8% lower than the 3,419 Total Sales recorded in December 2023. December’s Total Sales numbers continue a trend observed in recent years, as the past three years account for all but one of the lowest December Total Sales results in the previous 25 years.
New Listings
The trend was similar across New Listings, with the 11,592 New Listings in November easily eclipsing the 4,681 new properties listed in December (-59.6%). This decrease is more than the average decline from November to December (-52.0%), but the total is still higher than December 2023’s 3,894 New Listings (+20.2%). Similar to the late spring early summer stats of 2024, it appears that people took holidays early this year and pulled back from engaging in the market.
Active Listings
After seven straight months of Active Listings over 20K, December’s number fell to 15,393, a 29.4% drop (21,818). However, it’s 48.5% higher than the paltry 10,368 listed in December 2023. There is still a large amount of stagnant inventory that will take some time to be absorbed particularly in the condo market.
Toronto
It was much of the same in the 416, with the Average Sales price falling from $1,080,167 to $1,033,742 (-4.2%). The fall was starker with Total Sales, dropping from 2,236 to 1,174 (-47.4%).
The number of New Listings fell precipitously, from 4,360 in November to only 1,783 in December (-59.1%). It was similar to Active Listings, which decreased to 6,232 from 8,662 (-28.1%).
The Sales-to-New-Listings Ratio (SNLR) decreased to 40.7% from 41.0% in November. Meanwhile, the SNLR in the City of Toronto dropped from 39.3% to 38.9.
Keep in mind that for most of Toronto, prices didn’t climb as high during the pandemic and they didn’t fall as far during the crash from February 2022 onwards. Overall the anticipated rush of sellers who would need to desperately sell after not being able to afford their mortgages never materialized the way the media and economists had predicted.
Outlook
With inflation remaining in check and interest rates stable, variable mortgage rates are also expected to fall soon. Our next rate announcement will occur January 29th. These three key numbers should combine to improve the attractiveness of the GTA real estate market in 2025. With the drama south of the border, potential trade implications and a looming Canadian election, there are a few major factors that may also come into play.
While we are optimistic to see more momentum in 2025. for now it continues to be an excellent time to enter the market particularly purchasing a condo and a challenging time to upsize as many cannot confidently purchase before selling.
Thinking of moving to the next stage? Let’s chat. Send me an email (hillary@hillarylane.ca) or text/phone (416-882-4707).
Photo by Mike Kotsch on Unsplash
