The Toronto housing market is still feeling the effects of high interest rates, and spring isn’t looking as strong as we hoped. Some homes are selling, but the market isn’t back to normal yet.
Over the past few years, we’ve seen big changes. The pandemic created a real estate frenzy, and when interest rates went up, things slowed down. Now, even with some rate cuts, buyers are still hesitant. Many are waiting for bigger drops before making a move.
Fewer Showings, Fewer Offers
Lisa Bednarski, a broker with the BREL Team, has been in real estate for years. She says that before rates went up, a hot listing could get 70 showings and over 10 offers. Now, those numbers have dropped by half. Some homes still get multiple offers, but it’s nowhere near what we saw before.
Recent stats from the Toronto Regional Real Estate Board (TRREB) show February home sales were down 27.4% compared to last year. There were more new listings, meaning buyers have more options, and the market is leaning in their favor.
TRREB’s chief market analyst, Jason Mercer, says we need more interest rate cuts to see real movement. Some buyers are holding off, waiting for at least a 1-2% drop in borrowing costs. He predicts that once rates come down further, we’ll see an increase in home sales later this year.
Buyers Are Still Cautious
Many potential buyers fear overpaying in today’s market. Victor Tran, a mortgage broker with TMG The Mortgage Group, says some worry that if they buy now, home prices might drop further.
For example, if someone buys a $500,000 condo with 5% down, they’ll owe almost the full value of the home after mortgage insurance. If the price drops even 1-2%, they could end up owing more than the condo is worth.
Even though mortgage rates have started coming down, they’re still much higher than a few years ago. Loan qualifications remain tough, and affording a $1 million+ home in Toronto is still out of reach for many.
What’s Next?
Typically, the spring market picks up in January, but this year, activity has been slow. Mercer believes lower borrowing costs could boost home sales later in 2025, but uncertainty in the economy is holding some buyers back.
For now, buyers have more choice, and sellers need to price competitively to attract offers. If you’re thinking of buying, now could be a great time to negotiate, but if you’re waiting for lower rates, you may need to hold off a bit longer.
If you need expert advice on buying or selling in Toronto, feel free to reach out. The market may not be “normal” yet, but opportunities are still out there!
Richard Wang 