Toronto’s real estate market continues to demonstrate resilience in the face of economic challenges, with home sales rising by 2.6% in December 2024 compared to the previous year. The steady growth reflects a market that is balancing increased inventory, evolving buyer preferences, and affordability concerns.
This article dives into the numbers behind the sales increase, the factors driving the market’s performance, and how buyers and sellers can navigate the changing dynamics.
The Numbers: December 2024 Sales in Detail
The Greater Toronto Area (GTA) recorded 3,359 homes sold in December 2024, marking a 2.6% year-over-year increase. Detached homes accounted for 1,544 sales, reflecting their continued dominance, while condos followed with 972 units sold. Semi-detached homes and townhouses contributed 514 and 329 sales, respectively. Despite the modest sales growth, the average home price remained steady at $1.1 million, showing a 4.8% increase year-over-year.
What’s Driving the Increase in Sales?
The sales growth is influenced by several factors, including the Bank of Canada’s rate cuts, which have lowered borrowing costs and restored buyer confidence. With the average mortgage rate now at 4.6%, many buyers who had delayed their plans earlier in the year have re-entered the market.
Improved inventory levels have also played a role, with 16,920 new listings entering the market in November and December 2024, offering buyers a wider range of options. Additionally, Toronto’s economic stability, driven by job growth in sectors like tech and finance, has provided households with the income security needed to make significant purchases.
A Buyer’s Perspective
Marina, a 32-year-old graphic designer, had been renting in Toronto for over five years while saving for her first home. In December 2024, she purchased a one-bedroom condo in Liberty Village for $750,000, taking advantage of the lower mortgage rates. The reduced borrowing costs allowed Marina to secure monthly payments that fit within her budget, making her transition from renter to homeowner a reality.
Marina’s story reflects the optimism among buyers who are finding opportunities in today’s market conditions, despite ongoing affordability challenges.
Impact on Buyers: Opportunities and Considerations
The increase in sales activity signals growing buyer confidence, but affordability remains a key consideration. For many, the reduced borrowing costs have been offset by high home prices, particularly for detached homes, which average $1.46 million. Buyers are encouraged to explore more affordable property types, such as condos or townhomes, which provide entry points into the market without overextending budgets.
Suburban areas, including Milton, Ajax, and Pickering, offer additional options for buyers seeking space and value. These communities provide a balance of affordability and accessibility, making them attractive to first-time buyers and young families.
Impact on Sellers: Adapting to a Changing Market
Sellers are benefiting from the increased buyer activity, but the rise in inventory has made competitive pricing and presentation more critical than ever. Properties that are well-maintained and strategically priced are attracting multiple offers, particularly in high-demand neighborhoods like Scarborough and Richmond Hill. Sellers should also highlight unique features, such as proximity to transit, schools, or parks, to make their listings stand out.
Investing in professional staging and minor upgrades, such as repainting or modernizing fixtures, can significantly enhance a property’s appeal. In a market where buyers have more choices, these steps can make a meaningful difference in securing a sale.
Long-Term Trends and Expert Predictions
Toronto’s real estate market is expected to maintain steady growth heading into 2025, supported by stable interest rates and ongoing population expansion. Experts predict that sales volumes will continue to rise modestly, with first-time buyers and investors driving much of the activity.
The rental market is likely to remain robust, with increasing rents further motivating renters to transition into homeownership. However, affordability challenges may limit the pace of growth, particularly for detached homes and luxury properties.
The Human Element: Families Finding Opportunity
For Linda and Raj, a couple with two young children, the rise in inventory provided the perfect opportunity to upgrade from their semi-detached home. In December 2024, they purchased a four-bedroom detached home in Mississauga for $1.48 million, benefiting from reduced competition and a flexible seller willing to negotiate closing costs.
Their story underscores how families are finding opportunities to move into larger homes that align with their long-term goals, even in a market with rising prices.
A Balanced Market Offering Opportunities
The 2.6% increase in sales in December 2024 reflects a steady recovery in Toronto’s real estate market, driven by lower mortgage rates, increased inventory, and strong buyer confidence. For buyers, the current conditions offer a chance to secure properties with less competition, while sellers must adapt to changing dynamics by focusing on pricing and presentation.
As Toronto moves into 2025, the market appears poised for continued growth, offering opportunities for all participants in this dynamic housing landscape.
