Is housing in the GTA becoming more affordable?
GTA home sales fell 5.3% year-over-year in August 2024, with a slight increase in new listings. Despite a modest dip in average home prices, the market remains well-supplied. Recent Bank of Canada rate cuts are expected to enhance affordability, especially for first-time buyers.
Market Summary
Sales Momentum: Sales decreased by 5.3% compared to August 2023 and 7.72% from July 2024.
Listing Dynamics: New listings were up 1.5% year-over-year but down 23% from July 2024.
Active Listings: Active listings increased by 46% from 2023 but saw a 5.1% decline from July 2024.
Price Trends: Average home prices were down 0.8% year-over-year and 7.72% from July 2024.
Market Status: With 5 months of inventory, the GTA market is currently in a buyer's market. Sales to new listings ratio fell 3% from 2023 but rose 7% from July.
Time to Sell: Listings spent an average of 28 days on the market, while properties were on the market for 44 days.
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Impact of Interest Rates
On September 4th the Bank of Canada reduced it’s policy rate for the third straight time by a quarter point. The Bank of Canada’s recent rate cut is poised to improve housing affordability, particularly benefiting those with variable-rate mortgages. As borrowing costs decrease, we anticipate increased first-time buyer activity, which could stimulate the condo market and overall housing demand.
What Does This Mean for Buyers and Sellers?
For Buyers
Buyers will find favorable conditions with lower mortgage rates and modestly reduced home prices. The current market offers more choices, particularly in the condo sector, making it an opportune moment for those looking to enter or upgrade within the market.
For Sellers
Sellers in the GTA may experience a slower pace of sales due to the year-over-year decline, despite a stable inventory. With average prices slightly down, sellers should be prepared for modest offers but can benefit from increased buyer interest as affordability improves over time.
In Conclusion
The GTA housing market is navigating a period of adjustment with declining sales and slightly lower prices. The recent rate cut promises to boost affordability and buyer activity, setting the stage for a gradual market recovery.
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