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May 2025 Market Shift: New Era of Caution and Opportunity

The Greater Toronto Area (GTA) housing market continued to shift in May 2025, offering a clearer picture of the evolving dynamics that homebuyers, sellers, and investors must now navigate.

With significantly more inventory on the market and modestly improving affordability conditions, the pace and tone of the market have changed—though underlying economic uncertainty continues to cast a long shadow.

Is This the Window Buyers Have Been Waiting For?

In May 2025, GTA REALTORS® reported 6,244 home sales—down 13.3% compared to the same time last year. At the same time, new listings climbed by 14%, reaching 21,819. This surge in inventory has shifted the balance of power back into the hands of buyers, who are now negotiating in a less competitive, more opportunity-rich environment.

Active listings soared to nearly 31,000, representing a 41.5% increase year-over-year and marking the highest inventory level since 2002. Buyers today are not only facing less pressure to compete but also have more leverage to negotiate pricing, terms, and conditions.

Is the Market Finding Its Pricing Floor?

The average GTA home price in May settled at $1,120,879—a decline of 4%compared to May 2024. The MLS® Home Price Index Composite benchmark also fell 4.5% year-over-year.

Month-over-month, however, both the average price and benchmark saw modest gains, suggesting a market that is bottoming out and slowly adjusting to broader economic signals.

Importantly, borrowing costs have eased compared to one year ago, giving prospective buyers a slightly better affordability position, despite ongoing challenges in mortgage qualification and lender scrutiny.

No Rate Cut—Yet: BoC Stays the Course

On June 4th, the Bank of Canada held its overnight interest rate steady at 4.50%, citing encouraging inflation data and early signs of economic cooling. While some anticipated a rate cut to jumpstart housing demand and consumer confidence, the central bank opted for a more cautious stance. It acknowledged that although core inflation is trending downward, wage growth and shelter costs remain elevated, warranting a wait-and-see approach.

For real estate, this means more of the same in the short term: rates that are still restrictive by recent historical standards, but stable enough to encourage cautious re-entry by sidelined buyers.

Renewals and refinances remain a financial pressure point for many households, particularly those facing upcoming mortgage term expiries at higher rates.

Affordability Improves, But Confidence Wanes

Despite the technical improvements in affordability and increased supply, economic confidence remains fragile. Buyers are not rushing in. Trade disputes with the United States, tepid GDP growth, and ambiguity around federal housing policy execution are contributing to consumer hesitancy.

The prevailing mood is one of deliberation. While some well-capitalized buyers are acting on opportunities, many are waiting for either further rate relief or more clarity on the trajectory of home prices and the economy as a whole.

Opportunity Awaits the Informed and Prepared

The spring market has made it clear: this is not a crash, nor is it a boom. It is a recalibration.

The current environment favours buyers with long-term perspectives and access to financing, as well as sellers who price appropriately in light of today’s market realities. Above all, it reinforces the need for informed, strategic decision-making—working with a REALTOR® who understands the neighbourhood, the product type, and the financial landscape has never been more essential.

As we look ahead to the summer and fall markets, the next interest rate decision and broader macroeconomic signals will be pivotal. But for now, the message is clear: inventory is up, affordability is modestly improved, and opportunity exists—for those ready to move with eyes wide open.

Let’s Talk Strategy in a Shifting Market

Have questions about what these latest numbers really mean for you—or how rising U.S. tariffs, economic uncertainty, and rate volatility might affect your next real estate move?

Now more than ever, it’s essential to have informed, strategic guidance rooted in today’s market realities. Whether you’re planning to buy, sell, or simply assess your options, I’m here to provide a clear, confident path forward.

A Slow May in Toronto Real Estate

May home sales continued at low levels, especially in comparison to last spring’s short-lived pick-up in market activity. Home buyers are still waiting for relief on the mortgage rate front.

Existing homeowners are anticipating an uptick in demand, as evidenced by a year-over-year increase in new listings. With more choice compared to a year ago, buyers benefited from more negotiating room on prices.

Recent polling from Ipsos indicates that home buyers are waiting for clear signs of declining mortgage rates. As borrowing costs decrease over the next 18 months, more buyers are expected to enter the market, including many first-time buyers. This will open up much needed space in a relatively tight rental market.

TOTAL RESIDENTIAL TRANSACTIONS

In the Greater Toronto Area, 7,013 home sales were reported through TRREB’s MLS System in May 2024 – a 21.7 per cent decline compared to 8,960 sales reported in May 2023. New listings entered into the MLS System amounted to 18,612 – up by 21.1 per cent year-over-year.

AVERAGE SELLING PRICE

The MLS® Home Price Index Composite benchmark was down by 3.5 per cent on a year-over-year basis in May 2024. The average selling price of $1,165,691 was down by 2.5 per cent over the May 2023 result of $1,195,409. On a seasonally adjusted monthly basis, the average selling price edged up slightly compared to April 2024.

TOTAL NEW LISTINGS

AVERAGE DAYS ON MARKET

SALES & AVERAGE PRICE BY MAJOR HOME TYPE

Final Thoughts:

While interest rates remained high in May, home buyers did continue to benefit from slightly lower selling prices compared to last year. We have seen selling prices adjust to mitigate the impact of higher mortgage rates. Affordability is expected to improve further as borrowing costs trend lower. However, as demand picks up, we will likely see renewed upward pressure on home prices as competition between buyers increases.

In order to have an affordable and livable region over the long term, we need to see a coordinated effort from all levels of government to alleviate our current housing deficit and to provide housing for new population moving forward.

On top of this, governments need to ensure the delivery of infrastructure to support our growing population. The economic health and livability of our region depends on the timely completion of public transit projects including better transparency and clear timelines on the completion of the Eglinton Crosstown LRT.

Distinctive Real Estate Advisors Inc., Brokerage is pleased to present a recap of the latest market forecast release and May highlights from the Toronto Regional Real Estate Board (TRREB).

We’d welcome an opportunity to discuss A Slow May in Toronto Real Estate more. If you have any questions about our services, please contact our team.

GTA Has More Listings, Steady Prices and New Opportunities in April

April 2024 home sales were down in comparison to April 2023, when there was a temporary resurgence in market activity.

New listings were up strongly year-over-year, which meant there was increased choice for home buyers and little movement in the average selling price compared to last year.

Greater Toronto Area (GTA) REALTORS® reported 7,114 sales through the Toronto Regional Real Estate Board (TRREB) MLS® System in April 2024 – down by five per cent compared to April 2023.

TOTAL RESIDENTIAL TRANSACTIONS

New listings were up by 47.2 per cent over the same period. On a seasonally adjusted monthly basis, sales edged lower while new listings were up compared to March.

Listings were up markedly in April in comparison to last year and last month. Many homeowners are anticipating an increase in demand for ownership housing as we move through the spring.

While sales are expected to pick up, many would-be home buyers are likely waiting for the Bank of Canada to actually begin cutting its policy rate before purchasing a home.

The average selling price was up by 0.3 per cent to $1,156,167. On a seasonally adjusted month-over-month basis, the average selling price was up by 1.5 per cent compared to March.

AVERAGE SELLING PRICE

TOTAL NEW LISTINGS

AVERAGE DAYS ON MARKET

SALES & AVERAGE PRICE BY MAJOR HOME TYPE

Navigating the New Fiscal Landscape:

It is crucial to highlight the impending changes to the capital gains tax as outlined in Canadian Federal Budget 2024. These changes, effective from June 25, 2024, propose to increase the inclusion rate for capital gains from one-half to two-thirds for gains exceeding $250,000. The initial $250,000 will continue to be taxed at the existing one-half rate.

The imminent implementation of these tax changes is driving a notable increase in property listings and accelerated sales across the Greater Toronto Area (GTA), as investors are eager to capitalize on the current more favorable tax conditions before the new rates take effect.

Final Thoughts:

As we reflect on the April 2024 real estate landscape in the Greater Toronto Area, it’s clear that the market dynamics are aligning to offer both challenges and opportunities. Despite a decline in home sales compared to April 2023, a substantial increase in new listings — up by 47.2% — has enriched the market with more choices, benefiting buyers seeking diverse options without significant price fluctuations.

The average selling price has seen a modest uptick, reflecting a stable yet cautiously optimistic market environment. Key insights suggest a potential shift on the horizon, as lower borrowing costs anticipated later this year could tighten market conditions and stimulate renewed price growth as we progress into 2025.

The commitment from various government levels to enhance housing affordability and market alignment also underscores a critical need for coherent policies that support sustainable growth and meet the evolving demands of our growing population.

Distinctive Real Estate Advisors Inc., Brokerage is pleased to present a recap of the latest market forecast release and April highlights from the Toronto Regional Real Estate Board (TRREB).

We’d welcome an opportunity to discuss the GTA Has More Listings, Steady Prices and New Opportunities in April more. If you have any questions about our services, please contact our team.

GTA REALTORS® Release March 2024 Stats

The latest data from the Toronto Regional Real Estate Board (TRREB) reveals some interesting trends in the GTA housing market for March 2024.

Despite a slight dip in sales compared to March 2023, largely attributed to the timing of Good Friday, the GTA real estate landscape is showing signs of vitality and resilience.

RESIDENTIAL STATS

Key Highlights:

  • A total of 6,560 homes were sold in March 2024, marking a modest 4.5% decrease from March 2023.
  • New listings surged by 15%, indicating a healthier market supply. The average selling price saw a slight increase of 1.3% year-over-year to $1,121,615.
  • A noticeable uptick in new listings by 18.3% year-over-year in the first quarter reflects a market ready for spring.

Market Insights:

TRREB President Jennifer Pearce notes, “A gradual market improvement with more buyers adjusting to higher interest rates, and anticipation for a stronger spring market contributed to the significant rise in new listings.”

What is seasonal adjustment? Seasonality refers to a monthly (or quarterly) pattern that occurs in roughly the same manner from one year to the next, e.g., sales are highest in the spring and lowest in the winter each year.

HPI provides a price growth measure for a benchmark home with the same characteristics over time, allowing for an apples-to-apples comparison from one year to the next.

Future Outlook:

Experts predict an acceleration in price growth as the market heads into spring, driven by lower borrowing costs and a tighter market. TRREB Chief Market Analyst Jason Mercer anticipates, “Price growth is expected to accelerate, with sellers’ market conditions emerging in many neighbourhoods.”

A Call for Action on Housing Supply: 

As demand for both ownership and rental housing increases, TRREB CEO emphasizes the need for innovative solutions to boost housing supply and affordability. This includes exploring co-ownership models and encouraging gentle density in high-demand areas.

Final Thoughts:

The GTA real estate market is poised for an exciting period of growth and evolution. With anticipated lower borrowing costs and a focus on increasing housing supply, we’re looking forward to seeing how these dynamics will shape the market in the coming months. Stay tuned for more updates and insights into the GTA housing market!

 

Distinctive Real Estate Advisors Inc., Brokerage is pleased to present a recap of the latest market forecast release and March highlights from the Toronto Regional Real Estate Board (TRREB).

We’d welcome an opportunity to discuss the GTA REALTORS Release March 2024 Stats. If you have any questions about our services, please contact our team.

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