TORONTO — According to the Royal LePage House Price Survey released on October 10th, Canada’s housing market is showing signs of recovery, with the aggregate price of a home rising 1.6% year-over-year to $815,500 in Q3 2024. The Greater Toronto Area (GTA) reflects this trend, with homes averaging $1,155,800, a modest increase of 0.7%, despite a quarterly decline of 2.9%.
Phil Soper, CEO of Royal LePage, highlighted the ongoing challenges for first-time buyers and small investors, who are adopting a cautious wait-and-see approach. “First-time buyers, sensitive to interest rates, are postponing purchases, while small investors find the financials unworkable due to elevated carrying costs surpassing rental income,” he noted.
However, Soper anticipates that these groups will re-enter the market as property values begin to rise again. Recent interest rate cuts and new lending regulations, including the introduction of a 30-year amortization period for first-time buyers starting December 15, 2024, are expected to stimulate activity.
Total listings on royallepage.ca reached a historical high in September, up 19% year-over-year, indicating a willingness among existing homeowners to sell. This increase in inventory provides buyers with more options and less competition, setting the stage for a more dynamic market.
In the GTA, the median price for single-family detached homes rose 1.6% year-over-year to $1,421,000, while condominium prices dipped slightly by 0.4% to $722,200. “While activity was muted overall, we’re beginning to see an increase in buyer demand and sales,” noted Karen Yolevski, COO of Royal LePage Real Estate Services Ltd.
With the Bank of Canada’s key lending rate currently at 4.25%, further cuts are anticipated, and Soper believes this will boost market activity. “The stage is set for a busy year ahead,” he added.
Royal LePage forecasts that the aggregate price of a home in Canada will increase by 5.5% in Q4 2024 compared to the previous year, reflecting an uneven but positive recovery across the country. As confidence grows among buyers and new regulations ease affordability challenges, the spring market of 2025 is poised for significant activity.
Lower borrowing cost reduce the cost of borrowing for potential home buyers. Lower mortgage rates make home loans more affordable, which can stimulate demand in the housing market. As mortgage payments decrease, buyers are more likely to enter the market, especially first-time buyers. Overall, as interest rates decline, the combination of improved affordability, increased buyer activity, and persistent supply constraints can lead to a rebound in the housing market. However, it’s essential to monitor ongoing economic conditions, as various factors can influence the sustainability of this rebound.