Is Toronto’s real estate market turning a corner?

It’s an exciting time for the Greater Toronto Area housing market – buyers are finally catching a break. Thanks to recent interest rate cuts, home sales increased in September, up 8.5 per cent compared to last year. The improved affordability, especially in popular segments like condos and townhouses, has given first-time buyers more confidence to jump back into the market.

Lower borrowing costs

The key driver? Lower borrowing costs. As rates drop, more households can envision homeownership as a long-term investment. TRREB’s data shows 4,996 home sales in September, marking an encouraging rise from 2023, along with a 10.5-per-cent boost in new listings. With more options available, buyers are gaining negotiating power – a much-needed shift in a market that has seen its share of challenges.

According to TRREB Chief Market Analyst Jason Mercer, “The ability to negotiate on price led to moderate year-over-year price declines, particularly in the more affordable condo apartment and townhouse segments.” These price adjustments are welcome news, particularly for first-time buyers, giving them more flexibility and confidence.

Although prices have dipped slightly year-over-year, the market is stabilizing. The MLS Home Price Index dropped 4.6 per cent in September while the average selling price fell by a modest one per cent compared to last year. However, on a seasonally adjusted basis, prices have edged up since August 2024, signalling a positive trend.

Building momentum

Adding to the momentum, recent changes to mortgage lending guidelines have provided further relief. As TRREB CEO John DiMichele points out, “The ability for existing mortgage holders to shop around for the best rate without facing the stress test will result in more affordable renewals.” The introduction of longer amortization periods and the ability to insure mortgages higher than $1 million are giving buyers even more options as the market continues to recover.

With these favourable conditions, now may be the perfect time to buy. At TRREB, we remain committed to supporting buyers, sellers, landlords, tenants and realtors as they navigate the opportunities that lie ahead in this evolving market.

Visit trreb.ca for the latest look into the housing market and to connect with a TRREB member realtor.