TORONTO — Greater Toronto home sales fell slightly last month to cap a year that saw buyers take advantage of "substantial negotiating power" on price.
The Toronto Regional Real Estate Board said 3,359 homes were sold in December throughout the Greater Toronto Area, down 1.8 per cent compared with 3,419 in the same month the previous year.
It marked a slowdown from the previous two months, which both saw GTA home sales rise more than 40 per cent year-over-year.
"The thing that surprised me about December was it looked like things were rebounding," said Scott Ingram, a sales representative with Century 21 Regal Realty in Toronto.
He added the market can sometimes cool down faster than expected based on public sentiment when "things get crazy overheated."
The average selling price fell 1.6 per cent compared with a year earlier to $1,067,186, as the composite benchmark price, meant to represent the typical home, was up by less than one per cent year-over-year.
There were 4,681 new listings throughout the GTA last month, up 20.2 per cent from a year earlier.
In the City of Toronto, there were 1,174 sales in December, a 6.7 per cent decrease from last year. For the rest of the GTA, home sales rose 1.1 per cent to 2,185.
Sales of semi-detached and detached homes fell 9.3 per cent and 5.8 per cent, respectively, while 5.8 per cent more townhouses and 2.3 per cent more condos changed hands.
The board called 2024 a "transitionary" year for the region's housing market as sales rose 2.6 per cent to 67,610.
While 2023 marked the GTA's lowest year for sales volume since 2000, there wasn't a rush back to the market last year, as 2024 levels still mirrored those of 2001, said Ingram.
But he said 2025 could bring about a stronger turnaround.
"We're starting the year with lower rates, much lower than we started with last year, so I think that's going to help things a bit," he said.
The Bank of Canada lowered its policy rate by a half-percentage point in December, bringing it to 3.25 per cent, while signalling a more gradual approach to future cuts in the new year. It was the fifth cut the central bank had announced since June.
"If I compare to five years ago, three years ago, people are a lot more cautious now," said Ingram.
"But if I compare to a year ago at this time, things are probably starting to look up. Most people are a little more optimistic."
The modest increase in homes sold in 2024 was outpaced by a 16.4 per cent increase in new listings, at 166,121.
The board said that imbalance gave buyers "considerable choice" in the marketplace and effectively prevented widespread price growth. The average selling price for all home types combined was $1,117,600 in 2024, a decline of less than one per cent compared with 2023.
TRREB president Elechia Barry-Sproule said borrowing costs were top of mind for buyers in 2024.
"High interest rates presented significant affordability hurdles and kept home sales well below the norm," Barry-Sproule said in a news release.
"The housing market did benefit from substantial Bank of Canada rate cuts in the second half of the year, including two large back-to-back reductions. All else being equal, further rate cuts in 2025 and home prices remaining below their historic peaks should result in improved market conditions over the next 12 months."
Market conditions in 2024 were tighter for ground-oriented housing, with TRREB noting increased sales of single-family homes such as detached houses. Meanwhile, condo sales were down as those properties experienced "more notable" price declines.
Real estate watchers in the region have said the combination of high interest rates and an uptick in new condo units coming online last year led to an oversupply that will take time to balance out.
“Many would-be first-time buyers remained on the sidelines, anticipating more interest rate relief in 2025," TRREB chief market analyst Jason Mercer said.
"The lack of first-time buyers impacted the less-expensive condo segment more so than the single-family segments."
This report by The Canadian Press was first published Jan. 7, 2025.
Sammy Hudes, The Canadian Press
