Is the GTA Real Estate Market Coming to a Screeching Halt?

Is the GTA Real Estate Market Coming to a Screeching Halt?Home sales in the Greater Toronto Area were lower in June 2024 compared to the same month last year, which indicates a slowdown at first glance. Despite a Bank of Canada rate cut at the beginning of June, many buyers postponed their home purchase decisions and the market remained well-supplied, leading to a slight decrease in the average selling price compared to June 2023.

These factors have many potential buyers looking at homes for sale in the GTA wondering if now is a bad time to buy. Is the market coming to a screeching halt?

Bank of Canada Rate Cut

The Bank of Canada’s rate cut initially relieved homeowners and buyers, but the June sales results suggest that more rate cuts are needed before buyers become active. In June 2024, 6,213 home sales were reported through TRREB’s MLS® System, a 16.4 percent decline from the 7,429 sales in June 2023. New listings increased by 12.3 percent year-over-year, totaling 17,964.

The MLS® Home Price Index Composite benchmark dropped by 4.6 percent year-over-year in June 2024. The average selling price decreased by 1.6 percent, from $1,181,002 in June 2023 to $1,162,167 in June 2024. However, on a seasonally adjusted monthly basis, both the MLS® HPI Composite and the average selling price rose compared to May 2024.

High Supply Will Moderate Price Increases

TRREB Chief Market Analyst Jason Mercer noted that the GTA housing market is well-supplied, providing recent buyers with substantial choice and negotiating power. As sales pick up with lower borrowing costs, the high inventory levels will help prevent a rapid increase in selling prices. Despite the temporary dip in sales due to high interest rates, strong population growth continues to drive long-term demand for both ownership and rental housing.

Whether you are looking for a primary residence, a vacation home, or a rental property, the conditions are actually quite good. We know that looking back at how low interest rates were a few years ago can be discouraging, but the conditions now are still conducive to a smart investment. Supply of homes remains strong so that even as the Bank of Canada decreases rates we won't see prices skyrocketing. 

Knowing When to Buy

A common mistake we see by many potential buyers is anxiously awaiting perfect market conditions. The reality is, those "unicorn conditions" as many have called them only come around once every decade or less. It's better to focus on how you can afford a home in the current market conditions, buying real estate sooner rather than later and allowing the equity to begin to build. 

While we are seeing a noticeable slowdown in the market, don't fall for the clickbait headlines that claim the market is coming to a screeching halt. Buying a home in the GTA remains a smart investment with massive long term potential. The current market is characterized by lower sales and prices but also by strong underlying demand and significant inventory levels, and homeownership remains one of the best ways to build generational wealth and financial security.

We want to help you make a confident purchase, understanding the nuances of the GTA real estate market. If you want to learn more about homes for sale or whether now is a good time to buy, we're ready to talk, so contact us any time. 

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