GTA Real Estate 2024 - Market Update

A Transition Year with New Buyer Incentives

The Greater Toronto Area (GTA) housing market in 2024 was anything but predictable. While higher interest rates remained a challenge for much of the year, the Bank of Canada introduced some notable rate cuts in the latter half that spurred more market activity. The result? A modest bump in annual sales and a substantial increase in new listings. Let’s break down the numbers and look at the new incentives that could reshape the buying landscape heading into 2025.

Key Stats for December 2024

• Annual Sales: 67,610 — up 2.6% from 65,877 in 2023
• New Listings: 166,121 — up 16.4% year-over-year
• Average Selling Price: $1,117,600 — down just under 1% from $1,126,263 in 2023

What Drove These Numbers?

1. High Borrowing Costs
   For much of 2024, elevated interest rates slowed buyer activity. Borrowing costs were simply too high for many potential purchasers, which kept sales well below typical GTA levels.

2. Back-to-Back Rate Cuts
   Mid-year, the Bank of Canada announced two large consecutive rate reductions. This offered much-needed relief for buyers who had been waiting on the sidelines and gave the market a welcome boost in the latter half of the year.

3. Increased Inventory
   With new listings rising faster than sales, buyers found themselves in a more balanced environment, with significant negotiating power—especially in the condo market where price declines were more pronounced.

New Incentives You Should Know About

Despite a somewhat cautious market in early 2024, several new incentives have been introduced that may make homeownership more attainable:

1. CMHC Cap Increase to $1.5 Million
   The Canada Mortgage and Housing Corporation (CMHC) has increased the maximum insurable home price to $1.5 million. This means buyers looking at properties in the higher price range can potentially benefit from mortgage insurance—previously limited to less expensive homes.

2. Lower Down Payment for Homes Under $1.5 Million
   With the CMHC cap increased, buyers purchasing homes under $1.5 million may qualify for a lower down payment than before. This helps buyers free up capital for other expenses, such as closing costs or future home improvements.

3. First-Time Home Buyer Rebate for New Builds
   A rebate for first-time buyers purchasing newly built homes has been introduced (or improved). This helps offset the often-higher costs of new construction and could be a game-changer for those dreaming of a brand-new home.

4. Extended Amortization Period
   In some cases, amortization periods can be extended to 30 years, making monthly mortgage payments more manageable. This is particularly helpful for first-time buyers who are facing affordability pressures or want greater cash flow flexibility.

Looking Ahead to 2025

Two main factors will shape the 2025 market:

1. Further Interest Rate Cuts
   If the Bank of Canada continues to lower rates, buyers may regain further confidence, potentially pushing sales higher.

2. Prices Below Historic Peaks
   With average prices still below peak levels, there may be attractive opportunities early in the year—potentially setting the stage for price growth as demand picks up.

What This Means for You

• Buyers: Even though borrowing costs have been a concern, recent rate cuts and new incentives (like the CMHC cap raise, lower down payments, first-time home buyer rebate, and extended amortization) may create a more favorable environment. Condo buyers in particular may find competitive deals.
• Sellers: Ground-oriented housing (detached, semi-detached, townhouses) continued to hold value better, so conditions may still be in your favor if you’re thinking about listing.

Ready to make your move or want to learn more about these new incentives?
I’m here to help you navigate the ins and outs of the GTA market. Whether you’re buying, selling, or just planning your 2025 real estate goals.