Current Market Conditions

The real estate market displayed resilience and stability in the final quarter of 2024, signaling a shift toward a more balanced environment. Buyers benefited from having more time to make thoughtful decisions, while sellers saw home prices stabilize, aligning closely with fair market values. Although the average days on market increased, this provided opportunities for buyers and sellers to negotiate effectively and find mutually beneficial outcomes. By year-end, properties were spending an average of nearly two months on the market, reflecting a shift from the faster-paced activity earlier in the year. This steadier pace allowed for more deliberate transactions and reduced the pressure often associated with quick sales.

Demand and Interest Rates

In December, the Greater Toronto Area experienced a seasonal slowdown in demand. This moment of quiet presents an opportunity to look ahead. The upcoming months will be vital as new listings emerge and interest rates continue to evolve. The Bank of Canada announced on January 29th, 2025 another rate cut of 0.25%. After a long wait, fixed mortgage rates are more competitive than variable rates which provides you a chance to lock in a great deal. Now is the time to refine your search for the perfect home, reassess your financial strategies and review your mortgage qualifications in light of the optimistic rate changes and recent government incentives.

Supply of Homes

The supply of homes decreased significantly during the last quarter of 2024, largely due to the typical seasonal slowdown in active listings during the holiday season. This is positive news for sellers, as reduced competition often leads to stronger demand for the available properties. Yet, in Toronto, the inventory of condominiums remains higher than that of houses. This divergence exists because condominiums allow for significantly more units to be built within the same amount of land compared to single-family homes.

Market Outlook

The real estate market is entering 2025 with resilience and renewed opportunity. The post-holiday season is expected to bring an influx of new listings and previously expired listings, creating fresh possibilities for both buyers and sellers. Several factors will influence the housing market’s direction, including supply levels, interest rates, and government incentives. Staying informed about these variables is key to making educated and confident decisions. While no one can predict the short-term movements of the market, one thing remains certain: if your monthly mortgage payments align with your budget for a primary residence, or if an investment property meets your desired cash flow, you’re making a sound choice. Over the long term, housing prices have historically trended upward, making real estate a strong asset.