As the real estate landscape across the Greater Toronto Area (GTA) shows signs of continued softness due to persistently high interest rates, industry experts are predicting a potential surge in activity as we approach spring 2025. Speculation surrounding a future half-point reduction in the Bank of Canada’s key rate could be a game changer, though some agents fear it might be too late to stimulate the faltering fall market.

Hamilton realtor Rob Golfi expressed that earlier intervention would have made a substantial difference. "They should have acted sooner, like in the first week of October, which could have strengthened the fall market," he stated, cautioning that underwhelming fall sales might drive an overheated market come spring.

According to the latest figures from the Toronto Regional Real Estate Board, while sales slightly rose, the number of homes sold was notably down. In September, the average selling price held steady, rising just 1%, with 4,996 homes changing hands—a modest increase compared to the previous year. However, certain regions like Ajax have experienced notable price drops, with average home values shifting from just over $1 million to around $900,000—an almost 10% decrease.

Interestingly, as some areas in the GTA face declining prices, the situation varies across regions. For instance, Waterloo Region was reportedly enjoying a somewhat stable market due to new listings entering the fray. Realtor Tony Johal noted that the fall market began positively with an influx of inventory and an interest rate cut, leading to renewed buyer interest.

Despite the uptick in sales numbers, many realtors acknowledge that the volume and fervor of offers are far from previous years, where competitive bidding was commonplace. "It's definitely much quieter since the beginning of this year," Gordon remarked, pointing out that the number of competitive offers has halved since the bustling spring season.

However, there is a silver lining; the quality of buyers attending showings appears to be more serious. Toronto realtor Melanie Piche observed that, unlike the pre-pandemic era when casual browsers flooded properties, current showings are characterized by genuinely motivated buyers, as prospective homeowners cautiously assess their decisions.

Data from the BREL Team reveals a concerning rise in inventory, climbing to 25,612 properties listed across the GTA in September, while only 51,828 homes were sold in the first nine months of the year. Golfi's insights reflect similar sentiments in Hamilton, noting a record high in available homes, which has allowed buyers to explore options without feeling rushed.

This greater inventory has extended decision-making periods for buyers. "People are taking their time making decisions as the urgency is reduced," said Gordon, noting the average days on the market rose from 30 to 43 days year-on-year.

Additionally, open houses are making a comeback, with realtors adapting to this slower pace and striving to engage potential clients more effectively. However, this tough market environment has led some realtors to exit the industry, struggling to adapt to new realities.

Looking ahead, while many buyers remain cautious, waiting for a more substantial drop in interest rates, the holiday season typically brings a slowdown in real estate activities. Golfi believes that this period could present an opportune moment for buyers to enter the market, even though inventory may dwindle.

As the industry braces for the anticipated rate drop, Johal points out that initial activity spikes are commonplace following such changes but often settle quickly thereafter. The implementation of new mortgage rules on December 15 is also expected to shake things up, potentially raising the price cap for insured mortgages to $1.5 million and allowing a 30-year amortization period for first-time buyers, which could attract a diverse range of new buyers.

Piche indicates that her agency has seen a significant uptick in inquiries for January and February listings—a likely reaction to the upcoming mortgage changes. "Sellers are strategically waiting, recognizing that these changes will be more impactful in the winter rather than this fall season," she said.

All indicators suggest that while the market may be slow now, there is a collective anticipation for a heated spring market in 2025, with industry veterans like Golfi and Gordon believing that the transition from a dormant market to a bustling one can happen rapidly, akin to flipping a switch. The race for buyers could soon have real estate agents scurrying to meet the demands of an eager clientele.

Stay tuned as we watch the Toronto real estate market evolve through the coming months—could spring be the season of transformation?