The Toronto Regional Real Estate Board’s (TRREB) chief market analyst says homebuyers in the Greater Toronto Area (GTA), particularly those interested in purchasing a condo, can enter the market from a position of strength during the first half of this year.
Jason Mercer told BNN Bloomberg in a Tuesday interview that new condo listings in the region surged in 2024, far outpacing sales, giving buyers more leverage as inventory grew – a trend he expects to continue in the coming months.
“Buyers who were active in the marketplace were able to take advantage of that extra negotiation power and I think that’s going to feed through into the first half of 2025 as well,” he said.
“First-time buyers who are starting to move off the sidelines are going to take advantage of that sort of positive double whammy of downward trending borrowing costs and negotiating power in terms of their purchase.”
Mercer’s comments came on the same day TRREB released 2024 sales and inventory data. The board said overall home sales in the Toronto area last year were up 2.6 per cent, while new listing rose 16.4 per cent.
The combined average selling price for all home types was $1,117,600 in 2024, the board said, a decline of less than one per cent compared to 2023.
While affordability remains a top concern for would-be homebuyers, Mercer said recent interest rate cuts by the Bank of Canada helped ease some financial pressure and spurred activity toward the end of last year.
“We did see an uptick in activity in the fourth quarter of 2024, but I also think that there’s a lot of buyers that are still waiting to see more on the part of the Bank of Canada,” he said.
“Our polling suggests that there’s buyers out there that have every intention of purchasing a home in 2025, but they need to see maybe another 100 or 150 basis points in cuts before pulling the trigger.”
Mercer added that despite the rising inventory of condos for sale in the GTA, conditions in the traditionally highly sought after single-family home segment of the market remained “tighter,” with fewer available properties.
He also said that while the federal and Ontario governments have made an effort in recent years to remove barriers for developers in order to get more homes built quickly in the GTA, “it’s important not to take the foot off the gas.”
“Because right now we can talk about an elevated level of listings in the marketplace and that can kind of give people license to look at other sorts of policy measures, but by and large we’re going to continue to see strong population growth in the GTA,” Mercer explained.
“Ultimately, we are going to absorb that standing inventory we have right now, and we’re going to need to see that pipeline of supply pick up.”