GTA Market Reality Check : Here's what's changing

Let's cut through the noise and talk about what's actually happening in the GTA real estate market right now. Not speculation, not media hype—just the numbers and what they mean for anyone buying, selling, or investing in Toronto real estate.

The market is shifting. If you've been paying attention, you already feel it. Sales are down, inventory is up, and the frantic energy of the pandemic years is gone. But what does that actually mean for your next move? Here's the reality check you need.

The Numbers: Where We Stand

Overall market performance in November 2024:

• Sales volume down 15.8% compared to last year
• Average prices down 6.4%
• Days on market increased from 31 to 34 days
• Months of inventory jumped from 3.5 to 4.9 months

These aren't small shifts—they represent a fundamental change in market dynamics. We're moving from a seller's market where properties sold in days with multiple offers to a more balanced market where buyers have options and time to make decisions.

The condo market (416 area):

• Sales down 21.8%
• Prices down only 1.7%
• About 10,000 condos currently listed

Despite the drop in sales, condo prices are holding relatively stable. This tells you something important: while fewer people are buying, the properties that do sell aren't seeing dramatic price crashes.

Detached homes are feeling it more:

• 416 area: prices down 9.0%
• 905 area: prices down 7.9%
• About 13,000 freehold properties currently listed

Detached homes are softening more than condos because they saw the most aggressive price increases during the pandemic. What went up fastest is correcting hardest.

What 24,000 Listings Actually Means

Right now, there are approximately 24,000 active listings across the GTA—10,000 condos and 13,000 freeholds. To put this in perspective, during the pandemic peak, we sometimes had under 10,000 total listings.

Here's what's interesting: only 15% of condos listed are smaller than 699 square feet. That counters the assumption that the market is flooded with tiny investor units. The inventory is more diverse than people think.

With 4.9 months of inventory, we're approaching what's considered a balanced market (typically 4-6 months). This is a huge change from last year's 3.5 months, which still favored sellers. Buyers now have breathing room to be selective, negotiate, and avoid bidding wars.

The December and 2024 Projections

December 2024 is projected to see around 4,500 sales—slightly down from last year but still solid for a typically slow month.

For the full year, 2024 is expected to close with around 63,000 total sales. That's the lowest in 15 years, down dramatically from the pandemic peak of 127,000 sales in 2021.

Average prices have been steadily decreasing since August 2023, currently hovering around $1.039 million. That's still high by any historical standard, but it represents real softening from peak levels.

Why Condos Are Holding Better Than Detached Homes

There's a logical explanation for why downtown condos (416) are showing more price resilience than suburban detached homes.

Return to downtown: More people are returning to downtown offices and wanting proximity to work and amenities. The lifestyle that condos provide—walkability, transit access, urban amenities—is regaining value as remote work mandates ease.

Rising rents: Rental prices in the 416 core are increasing, which supports investor demand for condos. When rents go up, the investment case for rental properties strengthens, creating a floor under condo prices.

Prior price run-ups: Detached homes saw such extreme price increases during 2020-2022 that they had more room to correct. Condos, while they also rose, didn't reach the same proportional peaks.

The Supply Side: Why More Homes Are Hitting the Market

One factor many people aren't talking about: the aging population is releasing homes through estates and powers of attorney. As the largest generation in Canadian history ages, more properties are coming to market through inheritance and elder care transitions.

This isn't temporary. It's a demographic trend that will continue adding supply pressure for years. Combined with new construction (where it actually gets completed), we're seeing structural increases in available inventory.

Open Houses: The Reality of Buyer Activity

Let's talk about what's actually happening at open houses, because this tells you a lot about buyer behavior right now.

Recent weekend open houses saw limited attendance. One townhouse priced at $699,000 had three groups show up—two with agents, one unrepresented. That's it. Compare this to 2021 when open houses had lineups of 20+ groups competing to make offers.

The timing issue: Open houses need at least a week of advance notice to be effective. You need time for proper advertising on MLS, Broker Bay, and Realtor.ca. Signs attract neighbors, but the bulk of traffic comes from online exposure.

When open houses work: They're most effective within the first two weeks of listing, when the property is fresh and generates the most online attention. Holding an open house after a property has been sitting for months typically yields minimal benefit—everyone who was interested has already seen it online.

Pre-Construction Chaos: What You Need to Know

If you've bought pre-construction in the last few years, pay attention. Several major projects are being canceled or delayed—Cloverdale Mall, One Bloor, Arcadia, among others.

What this means:

• Builders are returning deposits (held in trust with bond insurance)
• Deposits must be returned with interest within 10 days of cancellation
• Buyers who put down 10% instead of 20% may face commission clawback issues
• Agents who received commissions on these deals should save that money until projects actually close

This isn't isolated. Multiple projects across the city are facing financial challenges, delays, or cancellations. Some developers are in receivership. If you're considering pre-construction, understand that completion risk is real right now.

The Vacant Home Tax: Don't Get Caught

Toronto property owners must declare whether their property is vacant or rented. Failure to declare results in a 3% tax on your property's assessed value.

Vacancy is defined as six months or more per calendar year. If your property spans two calendar years of vacancy, you could be hit with this tax for multiple years.

Make sure you file the declaration even if your property isn't vacant. The penalty for not filing is the same as the penalty for actual vacancy.

What Buyers Should Know Right Now

You have leverage. With 4.9 months of inventory and properties sitting for 34+ days, you're not competing with 15 other offers anymore. You can be selective, negotiate, include conditions, and take your time.

January is strategic. Historically, January sees median prices about 10% lower than peak seasons. If you're not in a rush, waiting for January could improve your negotiating position further.

Interest rate impact is modest. A quarter-point change in interest rates affects your mortgage cost by about $15 per $100,000 borrowed. Don't let fear of rate changes paralyze your decision if you find the right property.

Financing matters more than ever. Get pre-approved before you start looking. Banks are being more selective, and you don't want to make an offer only to discover you can't get financing.

What Sellers Should Know Right Now

Set realistic expectations. Your neighbor's house that sold in 2021 for $200K over asking is not a comparable. The market has changed. Properties are selling for asking price or below, and they're taking weeks, not days.

Pricing strategy is critical. Overpricing in this market means your property sits, goes stale, and eventually sells for less than if you'd priced correctly initially. Work with your agent to price at market value, not at your ideal number.

Presentation matters more. When buyers have options, they're pickier. Clean, staged homes with good photos get more showings and better offers than properties that look tired or cluttered.

Timing considerations. If you can wait until spring (March-May), you'll likely face less competition from other sellers and more active buyers. If you need to sell now, understand you're competing with 24,000 other listings.

What Investors Should Consider

Cash flow is harder. With prices still elevated and interest rates higher than the pandemic years, achieving positive cash flow on new purchases is challenging. Run conservative numbers and don't rely on appreciation to make deals work.

Condo resilience. The 416 condo market is holding prices better than detached homes, and rising rents support the investment case. If you're buying for rental income, downtown condos in the right locations still make sense.

Pre-construction risk. Multiple projects are getting canceled or delayed. Don't commit capital to pre-construction unless you're prepared for potential delays, design changes, or outright cancellation.

Bill 60 improvements. The recent legislative changes improving landlord rights make Ontario rental property investment more operationally viable. Factor this into your risk assessment.

What to Expect in 2025

The market is transitioning toward balance. We're not seeing a crash, but we're definitely seeing a correction from pandemic excesses.

Likely scenarios:

• Continued softening in detached home prices, particularly in the suburbs
• Condo prices remaining relatively stable in the 416 core
• Inventory staying elevated compared to 2020-2022
• Days on market continuing to increase
• More negotiation opportunity for buyers
• Realistic pricing becoming essential for sellers

Wild cards:

• Interest rate decisions (next Bank of Canada announcement expected soon)
• Economic factors like unemployment (currently 6.5%, down from 6.9%)
• Pre-construction market stability
• Government policy changes

The Bottom Line

The Toronto real estate market isn't collapsing, but it's absolutely shifting. The frantic energy is gone. Buyers have options and time. Sellers need to be realistic. Investors need to run careful numbers.

If you've been waiting to buy, this is a more favorable environment than we've seen in years. If you need to sell, understand you're not getting 2021 prices, and that's okay—the market is normalizing, not dying.

For those already in the market as homeowners or investors, your properties are still valuable assets. They're just not appreciating at unsustainable double-digit annual rates anymore.

The best move right now? Understand the actual market conditions, not the version being sold by people with vested interests in you believing prices only go up. Run your numbers conservatively. Make decisions based on fundamentals, not fear or greed.

The Toronto real estate market is alive and functioning—it's just functioning differently than it did during the pandemic years. And honestly, that's healthier for everyone involved.

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