Toronto home sales climbed 1.9% in November as easing mortgage rates drew buyers back into the market. The Toronto Regional Real Estate Board reported 6,450 transactions for the month, marking the fourth consecutive month of increasing sales following a 12.1% jump in October.
Toronto’s housing market, like much of the country, has been stagnant due to the Bank of Canada’s aggressive interest rate hikes. High borrowing costs sidelined many buyers, particularly in Toronto. Recently, however, the five-year fixed mortgage rate has dropped to around 4.25%, down from over 5% earlier this year, making it more feasible for prospective buyers to enter the market.
Detached homes were in high demand last month, fueling bidding wars and keeping prices steady. The average price for a detached house in the Toronto region rose 3.9% year-over-year to $1,452,518. Meanwhile, an influx of new and resale condos kept that market competitive, with prices dipping 2.5% to an average of $689,599.
November also saw a rise in new listings, up 4.4% after a 6.6% decline in October. The federal government’s newly announced mortgage policies, set to take effect in mid-December, could further bolster activity. These changes will allow smaller down payments on higher-priced homes and give first-time buyers the option of a 30-year mortgage term instead of 25 years.
TRREB anticipates an “accelerating market recovery” in 2024, supported by lower home prices compared to early 2022 peaks and the likelihood of further interest rate reductions. The Bank of Canada is expected to announce another rate cut next week, following four reductions since June, bringing the benchmark rate to 3.75%.
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