Mortgage Blog

It’s a new year and as we gear up for the upcoming Spring season, it is a good idea to take a look at the market outlook and what we are expecting to see around housing sales, prices, interest rates, and how these current conditions affect buyers versus sellers!  

Let’s dive into the Canadian Real Estate Association Forecast and more:

Greater Toronto Area (GTA)

• Housing Prices: The average home price in the GTA reached $1,135,215 in October 2024, reflecting a 0.8% increase year-over-year and 2.5% monthly growth. The City of Toronto itself saw a 3.4% increase, signaling continued demand despite higher prices. Areas like Mississauga and Brampton show mixed price trends, with Mississauga seeing a slight decline of 2.2% year-over-year, while Brampton experienced a 2.0% increase. These fluctuations reflect demand in more affordable areas within the GTA.  

• Rising Demand: Toronto remains one of Canada’s most sought-after markets, driven by its status as a global financial hub and growing tech sector. Suburbs like Mississauga, Brampton, and York Region are seeing rising interest as buyers seek more affordable options. Ontario's strong job market and immigration influx contribute to population growth, further boosting demand. While some cooling has been seen due to high home prices, the overall demand remains robust, especially for entry-level homes.  

Interest Rate Impact: Rates are expected to decrease into 2025 increasing buyer demand. Despite higher rates over the last two years, Toronto remains a seller’s market in many areas, though buyers will benefit from more favourable conditions as rates decline.

Expectations for Buyers

• Affordability Challenges: While interest rates are expected to decline gradually, the impact of high housing prices in major cities like Toronto and Vancouver will still be a challenge for many buyers. However, some relief is anticipated as lower rates could ease monthly mortgage payments.  

• Opportunity in the Suburbs: Suburban areas are projected to see more price stability and may be more attractive to first-time buyers and those looking for better value for money. Areas like Mississauga, Brampton, and Ottawa are seeing mixed price changes, making them viable alternatives to the high-cost core regions.  

• More Inventory: A growing number of homes available for sale could give buyers more choice, but competition may still exist in certain markets due to demand returning as rates ease.

Expectations for Sellers

• Tight Timing: Sellers in 2025 will likely benefit from a surge in demand in the spring and summer, driven by the stabilization or decline of interest rates. However, selling in a market with increased inventory may require competitive pricing.  

• Realistic Pricing: With the market expected to shift towards more buyer-friendly conditions, sellers will need to adjust expectations and price their homes carefully. Those listing too high might face longer waiting periods.  

• Stronger Negotiation Power in Suburbs: Sellers in high-demand, low-inventory areas (especially in suburban regions) may still enjoy more favourable conditions and could see prices rise or remain stable.

Key Takeaways for 2025

• Recovery Driven by Rate Cuts: Declining interest rates are anticipated to accelerate both sales activity and price growth in the latter half of 2025.  

• Regional Disparities: While Vancouver and Toronto remain expensive, other regions like Montreal and Ottawa offer growth potential due to relative affordability and robust economic conditions.  

• Inventory and New Construction: Higher inventory levels may moderate price increases in some areas, but affordability concerns and economic factors will shape regional market dynamics.

Overall, 2025 will likely be a year of transition with benefits to both buyers and sellers as the market continues to stabilize. 

Looking to purchase or renew your mortgage this year? Don’t hesitate to reach out to me.

source:dlc marketing

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