Andre Smit's Real Estate Round-up

Hi Folks,

So the Bank of Canada once again reduced its overnight lending rate by .25% down to 3% at the end of January. The consensus among the majority of banking economists, is that the bank will make 2 more .25% reductions before it pauses reductions, later this year.

There is no doubt that there are many buyers sitting on the sidelines waiting for the right time to jump into the market! I will address this phenomenon later when I look at the market prospects for 2025.

The actual sales to new listings ratio has moved down drastically from 72% in December, 2024 to 31% in January, 2025, putting us currently back into buyers' market territory. This is mainly due to total new listings increasing by a whopping 165% compared to December last year, while sales increased by only 14.5%!

According to the Toronto Real Estate Board, (the largest in Canada), compared to January last year, total new listings were up by 48.6%, while total actual physical sales were down by 8%. Yet the average price for all homes, still managed to increase by 1.5% from the same month, the year before. The average days that listings spent on the market, before selling, has stayed the same at 37 days.

Average detached house prices have increased by 2%, compared to January, 2024. The number of total new listings, increased by a whopping 54% for the same period, while physical sales decreased by 10%. The average days that listings spent on the market, before selling, has decreased from 36 days to 35 days, or 3%, for the same period.

Condominium apartment average prices decreased by 1.7% over the same month, with physical sales being down 13% and new listings up by 42%. The average days that listings spent on the market, before selling, has increased from 41 days to 44 days, or 7%, for the same period.

The Toronto Real Estate Board, (TREB), have just released their real estate statistics for 2024. TREB is the biggest real estate board in the GTA, and therefore, their results normally mirror those of the other smaller boards. This month, I will take some time to analyze their annual statistics.

In 2024, the total number of transactions increased by 2.6% from the previous year and new listings were up by 16.4% for the same period, which resulted in the average price for all transactions decreasing by 0.8% for the year. This resulted in the average days on market, before selling, increasing by 32%, from 19 days to 25 days, last year, compared to the year before.

The average property price decrease %s, 2024 vs 2023, for each housing category, were as follows:

Detached Homes – 0.74%

Semi-Detached Homes – 1.1%

Freehold Townhouses – 3.5%

Apartments – 2.1%

However, on average, 2024 was right on the edge between a buyers' market and a balanced market with the ratio of sales to new listings being 41%.

So, what are we expecting for 2025?

As stated earlier, the Bank of Canada is expected to decrease the overnight lending interest rate down to 2.5% or by another 17% before pausing for the year.

Inflation is expected to continue in the 2-2.5% range.

There is definitely pent up demand and the vast majority of these buyers will enter the market in early Spring. Therefore, total unit home sales are expected to increase by 12.4% for the year. The current high inventory of listings will quickly get gobbled up, and we will then move into a sellers' market for all categories, except condominium apartments, where the current buyers' market is expected to continue well into the end of 2025, due to the large current glut in supply.

With all of this, we are expecting the average home selling price to increase by 2.6% compared to 2024.

It is also interesting to note that first time buyers are likely to account for 42% of all home buyers. This is due to the banks offering lower promotional mortgage interest rates in an effort to gain market share in this valuable market segment.

If you are contemplating selling your home this year, now is the time to ensure that it is ready for the robust market expected in early Spring. Contractors are normally not very busy at this time of the year, so, now is the ideal time to negotiate great prices on any refurbishing work required. I am also available to do a walk through your home, in order to advise you regarding any work which needs to be done, in order to maximize your return on your investment, when your home is placed on the market.

I am currently compiling my portfolio of great homes to market in the next 2-3 months, and would be privileged to include yours. Remember the old adage: “The early bird catches the worm.” I just want to ensure that, as my clients, you catch the best, juicy worm possible!

SMIT'S TIP OF THE MONTH:

Inspect your roof for winter damage. Try using binoculars to look for loose, broken or missing shingles. Pay special attention to valleys, as these areas normally deteriorate at an accelerated rate. In some instances, patching badly worn areas, may extend your roof life.

If you, your friends or family have any questions regarding real estate, or indeed, require the services of a great realtor, please do not hesitate to call me at 416-898-2852, at anytime!

Until next month,

Stay warm and safe!

Kind regards,

André