September's interest rate cut was welcome news for homebuyers. With lower borrowing costs, more buyers were able to afford the monthly mortgage payments on a home that met their needs. The result was that 5,592 homes sold in the GTA, up by 8.5 per cent compared to September 2024 at an average price of $1,059,377. This now brings the YTD average price to $1,077,602, down 3.8% from the start of the year. It's obvious now that the 20-30% price drop that some people were expecting or perhaps hoping for will not occur and as borrowing costs continue to drop, more buyers will enter the market, and the increased competition will start prices rising again.
Two major factors have impacted the real estate market, high interest rates and the tariffs. Interest rates are now at reasonable rates, but buyers are nervous about the impact tariffs will have on them. Increased home purchases continue to stimulate the economy through housing-related spin-off spending, and that stronger economy will help to offset the impact of ongoing trade challenges. Once Canadians feel more confident, home sales will start increasing to previous numbers.
The average list to sale price in the GTA last month was 98%, proving that pricing a home at the right price, today's market value, results in a sale very close to the asking price. Many sellers try to hold out for an unrealistic price, hoping that they will find a buyer who is not aware of the current market value. If that does occur, let me assure you the mortgage appraiser will tell them they overpaid and they will not get the mortgage they need, and the sale would be nullified.
The way to succeed in today's market is to realize that great opportunities to upgrade your home exist in certain markets and that you cannot take advantage of those opportunities until you sell your property. If prices increase by 10% then a $1,000,000 property increases by $100,000 and a $2,000,000 property increases by $200,000. It's a great time to upgrade your home!
If you have any thoughts of upgrading or buying an investment property, give me a call and let me put my experience to work for you!
Have a great October!
