TORONTO — Greater Toronto home sales jumped again last month on a year-over-year basis, with one real estate expert saying the most recent interest rate cut in October was enough to start luring buyers back into the market.
The Toronto Regional Real Estate Board said 5,875 homes were sold in November throughout the Greater Toronto Area, up 40.1 per cent compared with 4,194 in the same month last year.
Month-over-month sales were up 1.9 per cent from October on a seasonally adjusted basis.
The average selling price rose 2.6 per cent compared with a year earlier to $1,106,050.
The composite benchmark price, meant to represent the typical home, was down 1.2 per cent year-over-year. The board noted that was a much lesser annual rate of decline compared with previous months.
"With selling prices remaining well off their historic peak and monthly mortgage payments trending lower, the stage is set for an accelerating market recovery in 2025," said board president Jennifer Pearce in a press release.
The Greater Toronto Area's home sales figures for November were in line with trends seen in other major cities, particularly Vancouver. The real estate board in that region said the number of homes that changed hands last month increased 28.1 per cent on a year-over-year basis.
Sales figures have risen nationally in recent months, marking a shift from the market's holding pattern as the Bank of Canada continues to lower its key interest rate.
The central bank is expected to cut rates for a fifth straight time at its final meeting of the year on Dec. 11. The rate currently stands at 3.75 per cent, down from the five per cent level earlier this year that deterred many would-be buyers from the housing market.
Vy Ngo, a sales representative with Big City Realty Inc. Brokerage, said the Bank of Canada's half-percentage point rate cut on Oct. 23 was the turning point the market had been waiting for.
She said the move was finally enough to motivate buyers after the GTA essentially "didn't have a summer or spring market."
"All the buyers have been sitting on the sideline waiting for rates to drop," said Ngo.
"I hope we get another interest rate drop in December. That'll definitely fuel the market even more."
There were 11,592 new listings throughout the GTA last month, up 6.6 per cent from a year earlier.
In the City of Toronto, there were 2,236 sales in November, a 40.5 per cent jump from last year. For the rest of the GTA, home sales rose 39.8 per cent to 3,639.
TRREB chief market analyst Jason Mercer said market conditions have tightened, particularly for single-family homes. He noted the detached market experienced average year-over-year price growth above the rate of inflation, particularly in the City of Toronto.
"In contrast, the condominium apartment segment continued to experience lower average selling prices compared to a year ago. Condo buyers are benefitting from a lot of choice and therefore negotiating power," he said in a press release.
"This will attract renter households into homeownership as borrowing costs trend lower in the months ahead."
All property types saw higher sales in November compared with a year ago throughout the Greater Toronto region.
That was led by townhouses with 46 per cent more sales, followed by detached homes at 43.9 per cent and condos at 36.3 per cent. There were 24.9 per cent more semi-detached homes that changed hands year-over-year.
Transactions were at their highest level since May 2023, when the Bank of Canada had paused its hiking cycle, said National Bank economist Daren King in a note.
"Although cuts in short-term interest rates over the coming months could continue to support the housing market, it will be important to look at the impact of the recent rise in long-term bond yields, which is likely to be passed on to fixed mortgage rates," said King, adding that sales figures were still 21 per cent below pre-pandemic levels last month.
"Furthermore, persistent affordability challenges in Toronto and a weak labour market could limit the extent of the recovery on the housing market in the region."
Ngo said she is also concerned about upcoming mortgage renewals amid rumblings about potential layoffs as the calendar gets set to flip to 2025. A weaker labour market tends to lead to more listings, she said.
"That would impact the buyer market, if we see more layoffs," she said.
"That slows down the economy, so that impacts buying and selling."
This report by The Canadian Press was first published Dec. 4, 2024.
Sammy Hudes, The Canadian Press