TORONTO — The Greater Toronto Area (GTA) saw a 1.8% decline in home sales in December, wrapping up a year characterized by significant buyer leverage and price negotiations. According to the Toronto Regional Real Estate Board (TRREB), a total of 3,359 homes changed hands last month, a drop from the 3,419 homes sold during the same period in 2022.

Despite a buoyant market earlier in the fall, December’s figures signal a cooling trend that contrasts dramatically with the previous two months, which reported year-over-year sales hikes exceeding 40%. Scott Ingram, a sales representative with Century 21 Regal Realty, noted, “While December appeared to show signs of recovery, the market can shift quickly due to public sentiment when it overheats.”

The average selling price in the GTA also experienced a slight decline, down 1.6% from December 2022, settling at $1,067,186. On the brighter side, the composite benchmark price—designed to indicate the price of a typical home—increased by less than one percent. Meanwhile, new listings surged by 20.2%, totaling 4,681 across the region.

Breaking down the stats, the City of Toronto itself registered 1,174 sales in December, a 6.7% dip compared to the prior year. In contrast, sales in the remainder of the GTA ticked up by 1.1%, totaling 2,185 transactions. This varied performance was more pronounced in specific home types; semi-detached and detached home sales fell by 9.3% and 5.8%, respectively. Conversely, townhouses and condos saw slight increases in sales, with a rise of 5.8% and 2.3%.

Looking ahead, the TRREB described 2024 as a “transitionary” year for Toronto's housing market, anticipating a small increase in sales overall to 67,610—a modest 2.6% climb. While 2023 marked the lowest sales volume in the GTA since 2000, experts predict a potential rebound, with Ingram suggesting that improvements could be seen by 2025.

“One positive factor is the lower interest rates we’re starting with this year, which are significantly lower than last year’s numbers,” Ingram added. The Bank of Canada also contributed to the optimism by reducing its policy rate by half a percentage point in December, bringing the rate down to 3.25%. This was the fifth reduction since June, indicating a steadying approach moving into the new year.

However, the cautious sentiment expressed by buyers remains notable. Ingram remarked, “Compared to three or five years ago, people are much more cautious now. Yet, when comparing to last year, there seems to be a glimmer of hope.”

While sales numbers ticked up modestly in 2024, new listings soared by 16.4%, resulting in an inventory surplus that restricted price growth. The average price for all home types in 2024 was recorded at $1,117,600—a marginal decline compared to 2023.

TRREB President Elechia Barry-Sproule highlighted the pressing concern of high borrowing costs which have constrained buyer affordability, keeping sales below desired levels. However, she remains optimistic about the potential for positive shifts in the market. With the expectation of further rate cuts and sustained prices below historic highs, the prospect of improved conditions looms over the coming year.

As demand fluctuates, the market showed strained conditions for ground-oriented housing, while condo sales faced challenges amid increased supply and notable price drops. This oversupply is attributed to both rising interest rates and an influx of new condo developments.

Analysts stress that many first-time buyers are waiting for more favorable interest rates in 2025, contributing to the slump in the more affordable condo market, and underscoring the challenges confronting both buyers and sellers in this evolving landscape.

With all eyes turned to 2025, many believe that the combination of strategic financial measures and a potential shift in buyer confidence could herald a more vibrant housing market in Greater Toronto.