What Trends are we Seeing?

The Toronto and Greater Toronto Area (GTA) saw opposing trends which orchestrated the first technical buyer’s market that has been seen since October 2023.  The number of new listings on a year-over-year basis increased by 21.1 per cent to 18,612 from 15,363 on the Toronto Regional Real Estate Board (TRREB).  At the same time the number of residential transactions on a year-over-year basis decreased 21.7 per cent to 7,013 from 8,960 on TRREB.  This resulted in a Sales to New Listings Ratio (SNLR) of 38 per cent.  A buyer’s market exists when there is a SNLR of 40 per cent or below (balanced market with SNLR between 40 per cent to 60 per cent and seller’s market with SNLR above 60 per cent).  What we saw from a trend perspective was that seller’s began to have comfort to place their properties on the market given impending rate decreases with the expectations that buyer’s would subsequently enter.  Many of the May 2024 listings may have been “in-progress” from prior seller rate reduction expectations that were not realized and yet the seller’s moved forward regardless given their preparation.  On the buyer side, it appears that most continued to hold off and, unlike January 2023, not jump into the real estate market until rate reductions actually became a reality.

Despite the presence of a buyer’s market climate and a notable reduction in sales on a year-over-year basis the average price in May 2024 was only 2.5 per cent below that of May 2023.  When looking at average price as report on TRREB for 2024, it is notable that there has been a consistent month-over-month increase from a reported $1,026,703 for January 2024 to $1,165,691 for May 2024.

What Lies Ahead?

Headlines for many real estate related publications during 2024 have been dominated by the theme of “when will interest rates go down?”.  We have officially shifted to a different discussion that will be underscored by “how much will interest rates go down?”.

What we know from the Bank of Canada (B of C) most recent announcement is that the pace of rate reductions will be slow.  We have been hearing economist’s postulate anywhere between three to four additional adjustments prior to the end of the year with an expected Policy Rate of around 3.75 per cent to 4.00 per cent.  What this means for the real estate market is really tied to the impact on potential purchasers.  We have heard via various survey’s that anywhere from 50 to 72 per cent prospective buyers in the 2022 real estate market have been sitting on the sidelines waiting for rates to adjust.  Of those sitting on the sidelines an estimated one in 10 indicated that as little as a 25-basis point reduction would be enough to bring them back into the real estate market.  Fundamentally, real estate decisions for buyers are made based on monthly cash flow not necessarily purchase price.  Based on a $600,000 mortgage, 25-year amortization the 25-basis point reduction changes monthly cash flow by approximately $88.  If we saw a full 100 basis point adjustment it would be approximately a $349 impact.

The answer to the “how much interest rates will go down?” will sit fundamentally with the inflation rate and the factors which drive it.  Below we see an illustration that depicts the relationship between inflation and interest rates.

A quick perspective on the items impacting inflation:

  • The Consumer Price Index (CPI) slowed to 2.7 per cent in April which is down from 4.3 per cent in December 2023
  • The three-month rates of core measures in the CPI eased to under two per cent in March and April which was about 3.5 per cent in December 2023
  • Excluding shelter from inflation figures the rate is 1.90 per cent
  • First-quarter gross domestic product is expanding less than forecasted and employment is growing at a slower pace than the working-age population

Overall, the economic outlook is shakier than stronger which creates an expectation that interest rates will decrease.  The B of C has indicated that the three risk factors that could impact the rate of and magnitude of interest rate reductions are i) global tensions ii) faster than-expected rise in house prices and iii) high wage growth relative to productivity.

Next steps for potential participants in the real estate market will depend on their specific situation.  For buyers, the opportunity to purchase now prior to price escalations coming to fruition should be considered.  For sellers, consideration should be given to if you are upsizing, right-sizing and the market you are operating in from a geographic and product type perspective.

What is Happening with Sale Prices

Sale Price Comparison
Product Type Changes from May 2023 to May 2024 Changes from April 2024 to May 2024
Toronto GTA Toronto GTA
Detached -11.4% -21.9% +0.2% -2.0%
Semi-Detached -3.5% -31.5% +3.8% -1.8%
Townhouse -16.9% -26.2% +3.4% 1.5%
Condominium -23.2% -25.8% 0.0% +0.3%


Number of Transactions Trend

When comparing May 2024 to May 2023, we saw the following trend:


Categories May 2024  May 2023 Percentage Change
Number of Transactions 7,013 8,960 -21.7%
Number of New Listings 18,612 15,363 +21.1%
Number of Active Listings 21,760 11,869 +83.3%


When comparing May 2024 to April 2024, we saw the following trend:


Categories May 2024 April 2024 Percentage Change
Number of Transactions  7,013 7,114 -1.4%
Number of New Listings 18,612 16,941 +9.9%
Number of Active Listings 21,760 18,088 +20.3%


Looking into the different geographic pockets of Toronto and the GTA we notice the following changes in number of transactions when comparing May 2024 year-over-year to May 2023 and month-over-month to April 2024. The breakdown per area and product type are as follows:


Number of Transactions Comparison
Product Type Changes from May 2023 to May 2024 Changes from April 2024 to May 2024
Toronto GTA Toronto GTA
Detached -11.4% -21.9% +13.5% -1.6%
Semi-Detached -3.5% -31.5% +14.2% -10.0%
Townhouse -16.9% -26.2% -2.3% -7.6%
Condominium -23.2% -25.8% -0.9% -8.4%

Footnote: Source of statistical data is from the May 2024 and April 2024 Market Watch report of the Toronto Region Real Estate Board (TRREB) MLS.


A – Monthly Percentage Change in the Number of Units Sold


B – Month Over Month Average Price Percentage Change




C – Seasonally Adjusted Month Over Month Average Price Percentage Change




D – Monthly Percentage Change in Average Sale Price


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