Toronto home sales recovered in September as rate cuts take hold
September 2024 TRREB recap
Penelope Graham, Head of Content
The Greater Toronto Area’s sleepy housing market saw signs of awakening in September, as lower interest rates and the promise of easier mortgage policies persuaded more buyers to shop for a home.
According to the Toronto Regional Real Estate Board (TRREB), the number of homes trading hands over the course of the month totalled 4,996, a year-over-year increase of 8.5%. That also ticked up 0.42% from August.
Sellers, many of whom have been hesitant to list their homes during this summer’s stagnant market conditions, also returned in force, with a total of 18,089 fresh listings hitting the market, up 10.5% from 2023, and a whopping 44.1% compared to the previous month. Overall, there are 25,612 homes for sale in the GTA region, up 35.5% from last year, and 13% month over month.
That’s led to a well-supplied market, with plenty of options for active buyers. As a result, home prices dipped by -1% on an annual basis, coming to an average of $1,107,291. However, that’s 3% higher than what was recorded in August, which was a comparatively slower month for activity. The MLS Home Price Index Composite benchmark (which measures the price trend for the most typical type of home sold, with the high and low extremes stripped out) was also down by -4.6% annually.
“The annual improvement in September home sales was more than matched by the increase in new listings over the same period,” stated TRREB Chief Market Analyst Jason Mercer in the board’s monthly release.
“This resulted in a better-supplied market and increased negotiating power for buyers re-entering the market. The ability to negotiate on price, led to moderate year-over-year price declines, particularly in the more affordable condo apartment and townhouse segments, which are popular with first-time buyers.”
Condo sales see slight improvement
Source: Toronto Regional Real Estate Board
The increase in sales was seen across all home types – even the beleaguered condo segment, which saw transactions plummet in August, held firm year over year with 1,312 sales – flat at 0.8%. Detached houses continue to lead the market in terms of sales volume, with 2,354 homes sold (+10.5%), but the largest growth was seen in the townhouse and semi-detached sectors, with 840 (14.3%) and 446 (12.6%) sales, respectively.
Sales concentrated in the 905-area markets
Source: Toronto Regional Real Estate Board
The surrounding 905-area markets were the ones with the most explosive growth in September, as sales were up 10.8% year over year with 3,188 homes trading hands. New listings also came back into the market in force, outweighing that sales activity with a 12.4% increase (representing 11,015 homes brought to market). That helps keep a lid on prices, with the regional 905 average coming in at $1,103,673 – a 1.1% year-over-year decrease.
Conditions were slightly more subdued within the City of Toronto proper; a total of 1,808 homes were sold, marking a 4.5% annual increase, and 7,074 homes were newly listed, up 7.5% compared to the same month in 2023. The average Toronto home price stayed relatively flat on an annual basis, dipping by 0.6% to $1,113,671.
Rate cuts, new mortgage policies to further boost market
The expectation that the Bank of Canada will continue to cut interest rates through the next year will help boost demand in the coming months, as well as a slew of new mortgage policies announced in late September that are designed to ease the mortgage qualification process, particularly for first-time and high-ratio mortgage borrowers. These include:
- Allowing first-time home buyers to extend their mortgage amortization period to 30 years, regardless of the size of their down payment or insured mortgage status.
- Expanding the maximum price cap to $1.5 million for insured mortgages, for all high-ratio borrowers.
- Removing the mortgage stress test for insured and uninsured borrowers switching lenders at renewal time.
Also read: Insured vs. uninsured mortgages – what’s the difference?
“We are pleased with the positive changes to mortgage lending guidelines announced over the past month. The ability for existing mortgage holders to shop around for the best rate without facing the stress test will result in more affordable renewals. Longer amortization periods and the ability to insure mortgages for purchases over $1 million dollars will give home buyers more options as the GTA housing market recovers. TRREB has long been calling for these changes to give buyers more flexibility as they navigate their home buying journey,” said TRREB CEO John DiMichele.
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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.