GTA home sales climb as buyers seize lower rates, but prices edge down

Homebuyers in the Greater Toronto Area wasted little time responding to the Bank of Canada’s September rate cut, with sales activity jumping 8.5% year-over-year. But while more households secured mortgages, the average selling price slipped nearly 5% as buyers negotiated harder in a market flush with options.

“The Bank of Canada’s September interest rate cut was welcome news for homebuyers. With lower borrowing costs, more households are now able to afford monthly mortgage payments on a home that meets their needs,” Toronto Regional Real Estate Board (TRREB) President Elechia Barry-Sproule said.

“Increased home purchases will also stimulate the economy through housing-related spin-off spending, helping to offset the impact of ongoing trade challenges,” Barry-Sproule said.

TRREB reported 5,592 home sales through its MLS System in September, up from 5,155 a year earlier. New listings also increased, rising 4% to 19,260.

However, the average selling price fell to $1,059,377, down 4.7% from September 2024, and the MLS Home Price Index (HPI) Composite benchmark dropped 5.5% year-over-year.

On a seasonally adjusted basis, sales were up from August, while new listings declined, suggesting a tightening in some market segments. Still, the average price remained flat month-over-month, inching up just 0.2%.

“While home sales have improved over the past year, they still remain below normal levels relative to the number of households in the GTA,” said TRREB Chief Information Officer Jason Mercer.

“Two more 25-basis-point interest rate cuts by the Bank of Canada would see monthly mortgage payments move more in line with homebuyers’ average incomes, further spurring home sales and related economic activity,” Mercer said.

The Bank of Canada has signaled it is ready to cut rates again if economic risks intensify, but July’s gross domestic product numbers may give policymakers reason to pause. 

TRREB CEO John DiMichele pointed to a broader challenge: “At a time when we are facing a collapse of new construction sales and starts, it’s time for us to come together as a unified voice, align our efforts, and collectively work to break down the remaining barriers that impede progress in housing development.

Price trends and market context

Detached homes saw the sharpest price declines, with the average falling 8.9% year-over-year in the 416 area and 0.8% in the 905. Condo apartments dropped 5.4% and 6.1% respectively. The sales-to-new-listings ratio hovered around 29%, reflecting a market that, while active, still favoured buyers in many segments.

The GTA’s housing market remains sensitive to rate movements, with affordability and supply constraints shaping both demand and price.

Broader economic indicators, such as Toronto’s 6.09% year-over-year employment growth and a 1.3% rise in GDP in July, suggest underlying resilience, but the path forward will depend on further rate decisions and coordinated industry action.

CMP

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