Overview: a look back at 2024 and predictions for the 2025 GTA housing market, including home sales, prices, inventory, interest rates, insured mortgage caps and more.
Interest rates dictated whether buyers would return, sellers would list, how much inventory was available, and whether prices would go up or down.
When the first rate cut finally happened in June, the market didn’t react as expected, with prices falling rather than rising.
It was an unpredictable year, with sales and prices behaving contrary to expectations and buyers and sellers left feeling uncertain.
Will the 2025 GTA housing market be any different?
Let’s find out by looking at the year that was and will be, including home sales, prices, inventory, interest rates, insured mortgages, and more.
GTA Home Prices, Sales & Inventory In 2024
Here’s a breakdown of GTA home prices throughout the year:
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January: $1,026,703
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February: $1,108,720
- March: $1,121,615
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April: $1,156,167
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May: $1,165,691
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June: $1,162,167
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July: $1,106,617
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August: $1,074,425
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September: $1,107,291
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October: $1,135,215
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November: $1,106,050
Based on the numbers above, we can see prices rose every month from January to May, experiencing their first drop in June—the same month the Bank of Canada (BoC) started cutting interest rates.
For the remaining half of 2024, prices trended down for the most part, with demand cooling despite lower borrowing costs.
So why did prices fall even after multiple rate cuts?
The answer is inventory, which reached its highest level since 2020.
While January had 8,312 new listings for sale, that number more than doubled in the coming months, rising to 18,612 in May and ending at 11,592 in November.
Global News informs:
[But] there is still a lot of inventory and therefore choice for homebuyers. …This choice will keep home price growth moderate over the next few months.
With more homes to choose from, buyers faced less competition and ended up paying lower prices.
The housing market did start to recover in the last few months, with year-over-year sales surging over 40% in October and November, thanks to two back-to-back rate cuts of 50 basis points.
Interest Rates In 2024
Move Smartly reminds us of how desperate people were for lower rates:
The Bank of Canada’s delayed rate cuts have chilled the mood leading into the spring market when most buyers and sellers expected cuts would have started already.
When the BoC finally cut rates in June, home prices dropped 0.3% from $1,162,167 to $1,106,617 the following month, while sales plunged 11.4%.
It turns out one rate cut wasn’t enough to bring back buyers, with many waiting for further reductions.
Since then, the BoC has slashed rates 4 more times, lowering its overnight lending rate to 3.25%.
But according to The Star, that’s still not enough, with most buyers hoping for 2%.
That would require interest rates to fall another 1.25%, which may not happen till mid-to-late 2025.
However, rate cuts are having an impact on the current market.
For example, the average homeowner is saving $1200 a month or $14,400 per year on their mortgage.
And as Canadian Mortgage Professional informs, October’s super-sized cut led to a frenzy of buying and selling activity:
Home sales in the Greater Toronto Area (GTA) saw a significant boost in November 2024, rising 40.1% year over year as lower borrowing costs and affordable prices brought buyers back into the market.
Prices also rose year-over-year, despite declining on a monthly basis.
So what does the interest rate forecast look like for next year?
2025 GTA Housing Market Forecast: Interest Rates
Rate cuts in 2025 are almost a certainty, but the size and frequency may be less than hoped.
Speaking of the December 11th rate announcement, Reuters reveals:
Macklem indicated that further cuts would be more gradual, a shift from previous messaging that continuous easing was needed to support growth.
So instead of 50 point reductions, we can expect 25 basis points, and instead of cuts at every meeting, we may see more rate holds.
But that doesn’t mean the BoC is finished lowering rates.
According to Money Sense:
The Bank of Canada signalled that it’s done with the big guns, but it likely still has bullets to fire as it eases rates with an eye to accelerating economic growth ahead…
In fact, CIBC predicts the central bank will lower rates by 25 basis points over the next four meetings (from 3.25% to 2.25%), while RBC forecasts 2% by mid-2025.
If that happens, what does it mean for homeowners, buyers and sellers?
2025 GTA Housing Market Forecast: Sales & Prices
Lower rates will bring countless benefits to homeowners, buyers and sellers.
For instance, homeowners will see their monthly payments fall further, helping avoid the so-called mortgage renewal shock many experts fear may happen in 2025.
Lower borrowing costs will also help first-time buyers, making it easier for them to qualify for a home loan.
And with new and active listings at 10-year highs, buyers will have plenty of choice when deciding what to purchase.
Since every rate cut pulls more buyers into the market, sellers can look forward to increased competition and higher prices.
In fact, Toronto home prices are projected to rise 5% next year.
Another consequence of more rate cuts is an early spring market.
Wealth Professional informs:
Experts are forecasting an early start to the spring housing market in 2025…with activity picking up as early as late January or February.
After a gruelling 2024, the 2025 GTA housing market will start favouring sellers as competition heats up.
Rather than add volatility, more rate cuts will help stabilize the market.
We saw this with November’s Sales-To-New-Listings-Ratio (SNLR) hitting 51%—placing the GTA firmly in balanced market territory—and putting buyers and sellers on equal footing.
While sales and prices are expected to rise next year, it will be a steady growth and provide long-term value to both buyers and sellers.
Housing Market Changes: Mortgage Caps & Amortizations
The federal government announced two changes that went into effect on December 15 which will have major ramifications for the 2025 GTA housing market.
The first is 30-year amortizations.
CBC News explains:
First-time homebuyers who are purchasing newly built homes can now qualify for a 30-year mortgage, giving them five additional years to pay off an insured mortgage.
The advantages of a longer amortization period include smaller monthly payments, greater purchasing power, and the ability to “port” your current mortgage to a new property worth over $1 million.
The other major change is increasing the insured mortgage cap to $1.5 million.
CTV News reports:
Previously, anyone purchasing a home for more than $1 million was required to front a minimum 20 per cent down payment to qualify for an insured mortgage. That cap is being increased to $1.5 million, opening access for those in cities like Toronto…where average homes eclipse the million-dollar mark.
As a result, buyers will see their minimum down payments decrease by more than $100,000 for homes between $1-1.5 million.
Since the average price of detached and semi-detached homes in the GTA is well over $1 million, the increased mortgage cap is expected to stimulate demand for such high-value properties.
And as more buyers enter the market, sellers can only benefit…
2024-2025 GTA Housing Market Conclusion
2024 was defined by interest rate cuts, record high listings, and a moderation in prices.
However, it also marked the beginning of the housing market recovery, with sales surging over the last few months.
2025 will continue to see lower rates, which will increase buyer confidence and lead to higher sales and prices.
Changes to insured mortgage caps and longer amortizations will help even more buyers enter the market and increase the demand for high-value homes.
Lower rates, more purchasing power, abundant inventory, and greater competition—2025 will be full of opportunities for both buyers and sellers.
Want to know more about the 2025 housing market? Contact me below for answers.
Wins Lai
Real Estate Broker
Living Realty Inc., Brokerage
m: 416.903.7032 p: 416.975.9889
f: 416.975.0220
a: 7 Hayden Street Toronto, M4Y 2P2
w: www.winslai.com e: [email protected]
*Top Producer (Yonge and Bloor Branch) — 2017-2024