Three Big Lessons from the 2024 Toronto Housing Market

Before we say goodbye to 2024, I want to look at what actually happened in the market by the numbers. Why was the pre-sale market so cold? Why did several thousand real estate agents in Toronto decide to change careers? Put simply, 2024 was a tough year for Toronto real estate.

I am Moe Asgarian, a senior real estate broker in Toronto. I worked with a lot of clients this year and I am genuinely grateful for the trust and the deals we closed, but here I want to talk about the broader trends. Let's review three markets, pre-sale, resale, and rental, then walk through four big policy moves that will shape 2025.

Thousands of agents walked away

Here is a striking one. The number of agents who left the Toronto real estate board last year was the highest since 1991. At the start of 2024 there were more than 75,000 members; now it is under 70,000. The reason is simple: interest rates are high, the market still is not attractive to investors, and a lot of people who came in to try it out found better opportunities and stepped away. I expect a good number of agents to change careers next year too, which leaves more room for the people who are in this full-time and serious. Costs are rising with all of this, and our annual membership fee went up as well.

Pre-construction went cold

I said it over and over through 2024: the pre-construction market was cold and quiet. High interest rates mean investors do not want to jump into the condo market, and that dealt the biggest blow to condos last year. The numbers say pre-construction sales were down roughly 90 percent from the 10-year average. That pushed builders to halt projects, and I reported plenty of big condo cancellations through the year. Here is a telling figure: the number of new condo construction projects in the GTA in the first three quarters of 2024 was 73 percent lower than the same period in 2022. The numbers tell the whole story.

Resale woke up in the fall

For much of 2024 buyers waited and the resale market was slow and heavy. The Bank of Canada made its first rate cut in June, but the market barely reacted, and inventory kept piling up. Things changed after four rate cuts; in October and November we finally saw movement, with home sales in the GTA up more than 40 percent versus the year before. New listings then dropped notably and the market started working through its existing inventory. Detached inventory fell from around 8 months to about 3.5 months, and even condo inventory came down from about 7 months to 5. These still are not great numbers, 5 months is high, but the last months of the year brought real activity. The strongest segment was townhouses, with only about 1.5 months of inventory. Overall the resale market is slowly moving toward recovery, and townhouses and homes in the 1 to 1.5 million dollar range can lead it.

Rents held up despite the supply

A lot of new condos were built in 2024 and the market filled with rental apartments. I honestly thought at the start of the year that all those rental condos would be left on landlords' hands. But thanks to immigration policies that drew a large number of newcomers, rents stayed high and did not fall much. The numbers show rentals ended up only about 5 to 10 percent lower than the year before. Immigration did more to hold the rental market together in 2024 than most people expected.

Four policy shifts heading into 2025

Four macro moves from 2024 will shape the new year. First and biggest, rate cuts. Nothing mattered more. From June onward the Bank of Canada cut at every meeting, three 25-point cuts in June, July, and September, then a larger half-point cut in October, and another half-point cut a few weeks ago to close 2024, bringing the overnight rate to 3.25 percent. Many economists expect more cuts in 2025, with the base rate possibly reaching 2.5 percent or lower. Cheaper loans mean more demand and real hope for a market pickup. Second, immigration. The government cut its 2025 permanent immigration target by 20 percent, down to 395,000, and plans to reduce temporary residents from 7 percent to 5 percent over three years. That shows up first in rentals, since about 50 percent of tenants are in that group, while the sales market feels it less soon because most buyers are citizens or permanent residents. Third, new mortgage rules effective December 15, 2024: the insured mortgage cap for first-time buyers rose from 1 million to 1.5 million dollars, first-time buyers with an insured mortgage can stretch amortization from 25 to 30 years, and renewals no longer require another stress test, making it easier to switch or refinance. Expect action and good discounts in the 1 to 1.5 million range, mostly townhouses and semis. Fourth, government change, in both Canada and the US; Trump won a four-year term, and Canada's government is on the edge of falling. If Trump's policies hurt Canada's economy, the Bank of Canada will cut rates further, and a Conservative government looks likely, which shifts how buyers and investors think.

That is my short review of 2024 and what is carrying into 2025. If you want to talk through what these shifts mean for your own buying or selling plan, fill out the form at the bottom of this page or book a free consultation and we will go through it together. Stay well and take care.