Toronto Housing Market After the Rate Cut: Buy, Sell, or Hold?

The Bank of Canada just lowered interest rates. Plenty of people bet it would happen sooner or later, and plenty insisted it was impossible any time soon. It happened, and the cutting cycle has started. To me this is less about the exact number and more about the signal it sends to every buyer and seller waiting on the sidelines. It says the worst is behind us and a new chapter is starting.

I am Moe Asgarian, a senior real estate broker in Toronto and ranked number 47 at RE/MAX worldwide. Here is what the rate cut means for buying and selling across Toronto and the GTA right now.

What the rate cut really signals

When the Bank of Canada lowers its rate, variable mortgage rates move down directly. Fixed rates come from government bonds, so they follow only indirectly. Right now you can find fixed loans between 3 and 5 percent, and most people avoid variable because it still runs higher. A single 25 basis point cut does not make homes much cheaper on its own. What it does is shift the mood. Buying a home is an emotional decision as much as a logical one. Remember how much the market moved when the foreign buyer tax arrived, even though only 2 to 3 percent of Toronto owners were non Canadian. The psychology matters more than the math.

A buyer's market for condos

The biggest effect so far is that buyers who were waiting are getting serious, and sellers have brought more homes to market in the past few weeks. There are a lot of condos and houses available, and this is genuinely a buyer's market. Inventory is high even in townhouses and houses. New condos keep arriving, so I expect the condo market to stay roughly flat through the end of the year without any dramatic move.

The growing gap between condos and freehold

Demand for freehold, detached homes, townhouses and semis is very strong, everywhere the location is good. The result is a large price gap. Today the difference between an average condo and an average detached home in Toronto is close to $1 million. Before 2022 that gap was around $700,000. At some point buyers say they can no longer afford a house and move toward a condo instead. The question is how wide that gap has to get before we see that shift in buying behavior.

If you want to buy, weigh your options

If you want a condo to live in, focus on a good building, a good layout, a good view and a good location, because you have plenty of choice and real room to negotiate below asking. Do not buy a condo right now unless you plan to live in it at least five years. For investors, there are condos priced at March 2020 levels with higher rents than back then. Another strong option is an assignment, where someone who pre bought from a builder sells their contract before closing. Many pre construction buyers today cannot qualify for a mortgage at current rates, so you can often take over their unit at a very good price.

If you want to sell, presentation wins

Condo prices are low this year and I do not expect them to climb until the second half of 2025, which depends on further rate cuts. A recent sale shows what works. We had a condo at 20 Bloorview, unit 1144, at Leslie and Sheppard in North York, listed at $640,000. With a tenant in place, we twice brought it to market and the best offers came in around $590,000. We worked with the client to have the tenant move out, cleaned and staged the unit, relisted at the same $640,000, and sold in under a week for $620,000. The market was no better than months earlier. Presentation and the right agent made the difference.

Whether you are buying, selling, or holding, your situation is your own and every market has its own character. Fill out the form at the bottom of this page or book a free consultation, and we will figure out the right move together, even if that move is to wait. Stay well and take care.