The Greater Toronto Area (GTA) real estate market has long been characterized by tight inventory and high prices, creating a seller’s market where buyers often found themselves competing for limited properties. However, 2024 has brought a significant shift in market dynamics, with rising listings reshaping the landscape and granting buyers more influence than they’ve had in years. This development has prompted many to ask: is the GTA real estate market finally tipping in favor of buyers? An examination of recent data and trends reveals the answer.
Rising Listings: A Key Factor in Market Shift
One of the most notable changes in the GTA market this year has been the sharp increase in new listings. According to the Toronto Regional Real Estate Board (TRREB), the number of new listings in September 2024 rose by 10.5% year-over-year, with 18,089 new listings compared to 16,377 during the same period in 2023. This influx of inventory has fundamentally altered the balance of power between buyers and sellers, creating more options for buyers and reducing the frenzied competition that characterized the market in previous years.
For the first time in recent memory, buyers have a greater degree of choice, allowing them to carefully evaluate properties rather than rushing to outbid competitors. The increase in supply has not only alleviated some of the pressure on buyers but has also led to a modest softening of prices, particularly in certain segments of the market.
The Impact on Prices: Buyers Gain Negotiating Power
Alongside the rise in listings, home prices have experienced a slight decline, further enhancing buyer leverage. In September 2024, the average home price in the GTA decreased by 1% year-over-year, falling from $1,118,215 in September 2023 to $1,107,291. This decline, though modest, represents a departure from the steady price increases seen in prior years and signals a more balanced market where buyers can negotiate more favorable deals.
Price reductions have been particularly pronounced in the condo and townhouse segments, which saw price drops of 3.5% and 0.5%, respectively. These segments, popular with first-time buyers and those seeking more affordable housing options, have become more accessible, further strengthening the position of buyers in the market.
However, it is important to note that while prices have declined in some areas, other segments, such as semi-detached homes in Toronto, have seen modest price increases, with values rising 1.3% year-over-year. This divergence underscores the complexity of the market, where certain property types and locations remain competitive despite overall trends favoring buyers.
Longer Days on Market: A Symptom of Increased Inventory
Another key indicator of the shifting market is the increase in average days on market (DOM). In September 2024, homes in the GTA took an average of 30 days to sell, up from 27 days in September 2023. While this may seem like a small increase, it reflects the growing ability of buyers to take their time when making purchasing decisions. In previous years, properties often sold within days of being listed, driven by intense competition and limited supply.
The longer time on market is particularly noticeable in the detached home segment, where sellers are facing more competition and buyers have more room to negotiate. As a result, sellers must now price their homes more competitively and be prepared for longer negotiation periods, a stark contrast to the seller’s market conditions that dominated in recent years.
The Role of Interest Rates: Boosting Buyer Confidence
The Bank of Canada’s interest rate cuts in 2024 have played a pivotal role in shifting the market in favor of buyers. With borrowing costs trending lower, many potential buyers who had previously been priced out of the market are now finding themselves able to qualify for mortgages. The prime rate, which stood at 6.5% in September 2024, represents a significant reduction from earlier in the year, enabling buyers to secure more affordable monthly mortgage payments.
Additionally, recent changes to mortgage lending guidelines, including longer amortization periods and increased flexibility for loans over $1 million, have further expanded the pool of eligible buyers. These factors have not only boosted buyer confidence but have also made higher-priced properties more attainable, particularly in the detached and semi-detached segments.
A More Balanced Market: What This Means for Buyers and Sellers
The increase in listings and the softening of prices have created a more balanced market in the GTA, where neither buyers nor sellers hold a clear advantage. For buyers, this represents an opportunity to purchase homes at more reasonable prices, with fewer bidding wars and more room for negotiation. First-time buyers, in particular, stand to benefit from the improved affordability of condos and townhouses, which have seen the steepest price declines.
For sellers, however, the rising competition means that pricing strategies must be carefully considered. Overpricing a home in this environment could lead to extended time on the market, as buyers now have more options to choose from. Sellers who are flexible with pricing and prepared to negotiate are more likely to secure successful sales, but the days of selling over asking price within hours of listing may be over, at least for now.
Jason Mercer, Chief Market Analyst for TRREB, summed up the situation, stating, “The annual improvement in September home sales was more than matched by the increase in new listings over the same period. This resulted in a better-supplied market and increased negotiating power for buyers re-entering the market“.
Looking Ahead: Will the Buyer’s Market Continue?
As the market continues to adjust to these new dynamics, many are questioning whether the current buyer-friendly conditions will persist. Much depends on future interest rate movements and whether the increase in new listings remains steady. If interest rates remain low and inventory continues to rise, it is likely that buyers will continue to enjoy favorable conditions throughout the remainder of 2024 and into 2025.
However, if economic conditions shift and interest rates rise again, or if the surge in listings slows, the market could quickly return to its previous state, where sellers regained the upper hand. For now, though, the balance of power has clearly shifted toward buyers, particularly in segments where inventory is abundant and prices have softened.
Conclusion: A Window of Opportunity for Buyers
In 2024, the GTA real estate market has shifted toward a more balanced landscape, with rising listings and falling prices granting buyers greater power than they have had in years. The increase in inventory, combined with lower interest rates and eased mortgage guidelines, has opened the door to homeownership for many who were previously priced out of the market.
While the market is not entirely in a buyer’s favor, the current conditions provide a rare opportunity for those looking to purchase a home in the GTA. Sellers, meanwhile, must adapt to the new reality of increased competition and more selective buyers. As the year progresses, all eyes will be on whether these trends continue or if the market shifts once again.
