The Greater Toronto Area’s (GTA) housing market saw a huge surge in sales in October compared to a year ago, signalling the return of buyers to the market following consecutive interest rate cuts, experts say.
Last month, there were more than 6,650 sales in the region, marking a 44.4-per cent increase year-over-year, according to the Toronto Regional Real Estate Board’s (TRREB) latest housing report. Meanwhile, on a seasonally adjusted basis, sales increased by 14 per cent from September.
October also saw a slight cooling in price growth which slowed to 3.3 per cent year-over year, though the average selling price still edged up by 1.1 per cent compared to October 2023, to $1,135,215.
“The GTA housing market really picked up in October, and it’s no surprise,” Toronto real estate broker Bethany King told Now Toronto on Wednesday, adding that there is a new found air of optimism in the market.
“First-time buyers might finally get their shot, and current homeowners could be ready to make their next move,” she added.
The real estate board attributed the rush to buy to four consecutive key interest rate cuts that began in June, which marked the first of three 0.25 per cent drops in a row, followed by a controversial 0.50 per cent cut in October, that some officials said would spark concerns about the trajectory of the Canadian economy.
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President of TRREB, Jennifer Pearce says the rush suggests that the Bank of Canada’s rate cutting tactics are beginning to push reluctant buyers into the market.
“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,” Pearce said in the report.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices, prompted this improvement in market activity,” she continued.
However, licensed mortgage broker and LowestRates.ca expert Leah Zlatkin says an emerging buyer-friendly market may lead to a more competitive landscape in 2025, but that pre-approved mortgages may give buyers a slight edge over their competition.
“Homebuyers who have found a property that they like [should] initiate the pre-approval process as the easing of mortgage qualification requirements and further rate cuts will intensify competition among buyers even further this holiday season and going into 2025,” she wrote in a statement on Wednesday.
Despite a rise in sales, the GTA housing market has a rich inventory, which TRREB says should keep price growth moderate for the time being.
However, once it wanes, and new construction projects lag behind population growth, experts expect to see an upward trend in selling prices into spring of next year.
King also warned of inventory counts, despite the positive turn in market activity.
“Overall, it’s exciting to see the market come back to life. But, of course, we’ll want to keep an eye on how much inventory is available. If listings stay tight, prices could keep climbing, so affordability will still be something to watch,” she told Now.
Last month, more than 15,300 listings were entered in the MLS System, up 4.3 per cent from a year ago.
MOST GTA HOMES SELLING UNDER ASKING
A study by real estate platform Wahi says many GTA neighbourhoods are experiencing under bidding as lower interests are yet to translate into homebuyer competition.
Overall, 88 per cent of GTA neighbourhoods with at least five home sales in October were in underbidding territory last month, according to Wahi.
“That’s roughly flat from September when 86 per cent of neighbourhoods were underbid, but up seven percentage points compared to a year ago,” the study says.
In addition, 70 per cent of all home sales in the GTA last month sold for less than the seller’s asking price.
The top five neighbourhoods for underbidding were concentrated in upscale neighbourhoods with price points between $2-4 million, including York Mills (North York), Mineola (Mississauga), Eastlake (Oakville), Lawrence Park (Toronto) and Ledbury Park (North York).
Meanwhile, the most overbid neighbourhoods were priced in the low-to-mid-$1 million range and include: Whychwood Park (Old Toronto), Milliken Mills West (Markham), Milliken Mills East (Scarborough), Bridlewood (Scarborough) and Raymerville (Markham).
