GTA home sales up 15% between December and January
January 2024 TRREB update
Greater Toronto Area home buyers kicked off the new year with optimism, as sales picked up compared to December.
According to the Toronto Regional Real Estate Board (TRREB), a total of 3,847 properties were sold over the course of the month, up 14.5% month over month. From an annual perspective, though, the market remains in recovery mode, as transactions still lag last year’s activity by -7.9%, and mark a deeper year-over-year decline than the -1.8% that was recorded in December.
Sellers, meanwhile, were out in full force, with a number of new listings adding to an abundant supply of homes for sale. A total of 12,392 homes were brought to market, up 48.6% compared to the same time period in 2024, and a whopping 164.7% increase from December. Overall, there were 1,764 more active listings at the end of January than at the end of the previous month, at a total of 17,157 on the market, up 70.2% Year over year.
That wave of fresh supply has helped keep a lid on price growth, with the average home price staying roughly flat; homes sold for an average of $1,040,994 in January, up a scant 1.5% annually, and dipping by 2.4% on a monthly basis. The MLS Home Price Index, which measures the most typical type of home sold in the GTA, ticked up by 0.44% year over year.
Prices to remain stable through 2025: TRREB
That generous supply should help prevent any large price spikes in 2025. According to the board’s market experts, annual price growth should keep pace with the rate of inflation, increasing moderately over the course of the year throughout the region.
A hot spring market appears to be in the cards, as buyers will pounce on comparably lower mortgage rates. However, growing economic uncertainty and fears of a tariff-induced recession could dissuade some buyers from getting into the market, says TRREB Chief Market Analyst Jason Mercer.
“A growing number of homebuyers will take advantage of lower borrowing costs as we move toward the 2025 spring market, resulting in increased transactions and a moderate uptick in average selling prices in 2025,” he stated in the board’s January release. “However, the positive impact of lower mortgage rates could be reduced, at least temporarily, by the negative impact of trade disruptions on the economy and consumer confidence.”
Overall, TRREB forecasts that a total of 76,000 homes will sell in 2025, a year-over-year increase of 12.4%. Cheaper mortgage rates, combined with “ample supply” will provide some of the most buyer-friendly affordability conditions seen in some time, which could help incentivize those who may otherwise put off their purchase.
TRREB forecasts the average GTA home price to rise slightly to $1,147,000, up by 2.6% year over year, for all home types combined. Price growth will be stronger for single-family homes, as compared to the well-supplied condo apartment market.
"As we look to the future, prioritizing housing diversity and supply remains paramount. Encouraging the development of missing-middle housing—such as townhomes, duplexes, and low-rise multi-unit buildings—is critical to delivering a range of attainable options for individuals and families. Purpose-built rentals also play a vital role in ensuring everyone has access to a place they can call home," said TRREB President Elechia Barry-Sproule.
Borrowing costs are set to lower further in 2025
With the tariff narrative changing on an almost-daily basis, it’s challenging to put together an accurate mortgage rate outlook – and that makes it especially tough for Canadians who need to buy a home, or make a mortgage rate decision.
Fixed mortgage rates have decreased over the last week as bond yields – which lenders use as the benchmark for their pricing – dropped on February 3rd, after the tariff executive order was signed by US President Donald Trump. As a result, the lowest five-year fixed mortgage rate in Canada is now 3.89% – the lowest a fixed term has been since 2022. However, bond markets can be volatile, as investors react to any indication that inflation could rise, or a recession could be upon us. Borrowers looking to secure a good fixed rate option are wise to get a rate hold now to guarantee access, even if yields and fixed rates rise again in the near future.
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Variable mortgage rates, meanwhile, are set to lower in 2025 – but it’s unclear by how much. In a non-tariff scenario, it’s generally expected that the Bank of Canada will cut twice more this year, bringing its benchmark overnight lending rate down to 2.5% by later this year. However, if 25% tariffs come through in full force, the BoC could be forced to cut its rate at a much more aggressive cadence; some economists had even called for an end-point of 1.5% for the BoC’s rate, a full percentage point below the previous forecast.
“Lots of uncertainty” ahead
Where rates actually end up, however, may be somewhere in between – especially as it seems more likely that the threat of tariffs will be used as leverage, rather than implementing the tariffs themselves. According to an economic analysis note written on February 7 by Robert Kavcic, Senior Economist and Director of Economics at BMO, the lender re-set their forecast back to where it was pre-tariffs – though taking into account their impact on business investment and other areas of economic activity.
He writes that between now and April 1st, Trump will receive further tariff recommendation reports, which could make a stronger case for him putting them into place, including a ‘global supplementary tariff’.
“Lots of uncertainty still lies ahead on this front,” he writes. “All that said, our new base case sees slightly weaker Canadian growth than the original (1.7% vs. 1.9% for 2025), a slightly weaker loonie (now staying above C$1.40 all year), and more downside risk to our Bank of Canada call (50 bps worth of rate cuts by this summer). What the latest episode has taught us is that, even with signed legal documents and hard deadlines, you just never know. And, it’s easy to see business confidence and investment held back as such.”
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Penelope Graham, Head of Content
Penelope has over a decade of experience covering real estate, mortgage, and personal finance topics and her commentary on the housing market is featured on both national and local media outlets.