Greater Toronto Area

Modest Gains in GTA Home Sales Amid Surge in New Listings

In September 2024, the Greater Toronto Area (GTA) saw a slight uptick in home sales, with a 0.4% increase compared to the previous month and a 7.6% rise year-over-year, totaling 4,996 homes sold. While this growth is noteworthy, it was significantly overshadowed by an influx of new listings, leading to a pronounced shift in the market dynamics.

The surge in new listings resulted in a sales-to-new-listings ratio (SNLR) of 28% for September, a stark drop from August 2024's SNLR of 39.7%. This decline signals a clear transition towards a buyer's market, as the demand for homes has not kept pace with the burgeoning supply. New listings saw a dramatic 44% increase month-over-month, contrasting sharply with the modest 0.4% rise in sales. In the City of Toronto specifically, the SNLR was even lower, recorded at just 26%.

Amid these market shifts, the Bank of Canada's interest rate cuts in June, July, and September 2024—each by 0.25%—were the first reductions in over four years. These cuts have sparked optimism about a potential rebound in the housing market as buyers could be encouraged to re-enter. However, a survey conducted by the Toronto Regional Real Estate Board (TRREB) in June 2024 revealed that a cumulative rate reduction of at least 1.00% would be necessary to significantly motivate potential buyers to return to the market.

Looking ahead, discussions are underway about a possible 0.50% rate cut in October 2024, with further reductions anticipated in late 2024 and into 2025. These potential cuts could cumulatively reach a total rate reduction of 1.25% sooner rather than later. Despite these positive signals, the market has seen a more substantial influx of sellers, who had previously been waiting to list their homes, rather than a significant return of buyers.

In summary, while home sales in the GTA posted modest gains in September 2024, the overwhelming increase in new listings has shifted the market in favor of buyers. The ongoing adjustments in interest rates by the Bank of Canada may eventually encourage more buyers to re-enter the market, but for now, the supply of available homes continues to outstrip demand.