The real estate market across much of the Greater Toronto Area and beyond continues to remain soft as interest rates remain high, but we could soon see things sell at a brisker pace next spring.
It has been speculated that the federal bank is expected to drop the Bank of Canada rate in the coming months by a half-point, but Hamilton realtor Rob Golfi believes it will be too late to boost the fall market.
“They should have done it early, like the first week of October and it would have it would have really made the fall market stronger than it is,” he explained, noting that he was concerned that sluggish fall sales will lead to an overheated spring market.
The soft market realtors spoke about were backed up by numbers released by the area’s largest real estate board at the start of the month, which showed that while sales were up slightly, the number of homes changing hands was down.
The average selling price for a Toronto-area home remained flat with an increase of one per cent in September according to the Toronto Regional Real Estate Board while 4,996 homes were sold, which is a modest gain from a year earlier.
Prices have also fallen in other areas around the city, according to a realtor in Durham Region.
“In Ajax, I think they were floating just over a million at that time in terms of average price, and that’s dropped to just over ($900,000.) So we’re close to a 10-per cent reduction,” Ajax realtor Doug Gordon said.
Tony Johal, a realtor in Waterloo Region, says things have been OK as fresh product arrived on the market in September when the fall market kicked off.
“We kicked off the fall with an interest rate drop plus some inventory coming on the market that had been probably held back until the fall,” he explained. “And when inventory hit the market, then all of a sudden buyers now have options and they come out of the woodwork.”
While the number of sales were up slightly in Toronto, realtors have not seen the offers they have had in the years past or even this past spring.
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Many realtors in Toronto use a product called Broker Bay to book showings, according to Gordon. He noted that it also allows realtors to notify their counterparts when an offer has been made in an effort to drum up interest.
“It’s definitely much quieter since the beginning of this year,” he explained. “So the number of offers dropped in half since the spring.”
Some realtors say that in many cases, showings have also slowed down as well but not all showings are created equal.
“The good part is that the people coming through on showings are serious buyers,” explained Toronto realtor Melanie Piche. “When. People were on lockdowns, everyone just wanted to go look at properties for fun. Right now, it’s not a hobby. People looking at properties are serious, they’re motivated.”
She noted that since houses are spending more time on the market, they are slower to get bodies through. When things were overheated in 2021, and a house would sell in a week, they would get five people through in a day but that is no longer the case.
The slow sales in 2024 has created a glut of inventory in Toronto, according to numbers provided by Piche’s agency, the BREL Team.
They recently shared that there were 25,612 properties on the market across the GTA in September, while there were 51,828 homes sold over the first nine months of this year.
That extra inventory has also been seen by Golfi over in Hamilton.
“My inventory was at its highest I’ve ever had of homes and the real estate board inventory was high also,” Golfi shared. “We’re finding that people have more choices.”
This extra choice has allowed for sellers to be more considerate about their purchases as the fall market kicked off.
“People are taking longer to make those decisions because they’re not feeling rush to make offers on properties,” Gordon said. “You know that the pressure is not there and the number of offers have dropped.”’
This extra time taken has seen houses remain on the market for a longer time period.
“Since I think last September we were at 30 days average total average days on market, whereas this September we were 43,” Piche said.
The slower pace of sales has forced realtors to adjust how the are handling the sales end of things as well. Open houses have returned while realtors are also forced to pay closer attention to every aspect of their job.
Golfi said that some realtors are leaving the business while others are struggling with the new realities.
“It is a lot tougher now, too. In this business, there’s no doubt,” he said.
The realtors say that a number of buyers are still sitting on the sidelines waiting for a bigger decline in interest rates, but the market is traditionally very slow as we get closer to the holiday season.
Golfi believes that might be the time for buyers to pounce but there will also likely be less inventory available at the same time.
While the realtors are hoping that the next rate cut will lead to a boost in activity, the others so far this year have not had much of effect.
“What ends up happening is when the rate drops, the week or two kind of surrounding that is where you will get the most activity,” Johal explained. “You’ll get a little bit of a spike in the market, but you’ll find that it kind of levels out very, very quickly.”
But there are also other changes looming on the horizon which could lead to an increased activity next spring.
New rules surrounding mortgages will come into effect on Dec. 15, which will increase the $-million price cap for insured mortgages to $1.5 million and will also allow first-time buyers to have a 30-year amortization period for mortgages.
“Certainly if you’re looking for more central Toronto, that’s going to bring in a whole different set of buyers with a different budgets,” Piche said.
The realtor noted that her company has been contacted by a record number of people who are looking to list in January and February, which in part has been spurred by the mortgage changes.
“I think the sellers are partially waiting for that as well, recognizing that those changes aren’t going to have an impact on this fall, but they certainly will in the winter,” Piche said.
The realtors all seem to realize that there are buyers sitting on the sidelines waiting to enter into the market but it is just a matter of when.
“I do think the spring market in 2025 is going to be very good,” Golfi said. “It’s going to be very good for sellers.”
Gordon, who has been in the industry for 20 years, believes that when the market does get hot, it will be like flipping a light switch.
“The last number of times that we’ve seen the market warm up, it’s so fast,” he offered. “I mean, it goes from being really quiet to where you’re calling people almost begging them to come through your listings and have a look. Just trying to get that foot traffic in to there’s a lineup at the door for an open house and multiple offers coming back in a hurry.
“It seems the market shifts in very in a very quick timeframe.”
