As we look ahead to 2025, several key developments are expected to shape the market, and this may be a great time to strategize for your next move!

Ontario Market Outlook

Ontario’s real estate market is projected to gain momentum in 2025, with home sales expected to rise nearly 10%, driven by pent-up demand from buyers awaiting further interest rate cuts. After a slow 2023 and a modest 1.5% rise in sales this year, the Canadian Real Estate Association (CREA) anticipates a more stable market in 2025, returning to levels we’ve seen in past years.

Key Projections:

• Sales: Following a 12.3% decline in 2023, the forecast for 2025 suggests a 9.9% increase in home sales.

• Home Prices: Prices are expected to grow modestly by 2.4%, signaling a return to balance after the volatility of the past few years.

Interest Rates and Market Impact

In recent months, the Bank of Canada has made several rate cuts, lowering the key interest rate from 5% to 4.25%through reductions in June, July, and September. As predicted by Economists an additional 0.5% cut on October 23rd occurred which could drive further changes in buyer behaviour.

While these cuts haven’t spurred the dramatic recovery some expected, we’ve seen a trend of three consecutive months of rising sales, according to CREA’s senior economist, Shaun Cathcart. However, with the pace of interest rate cuts now expected to accelerate, many buyers may hold off on purchases until 2025, when even more favorable conditions are anticipated.

Current Market Activity

A surge of new listings in September has provided buyers with more options before the typical year-end slowdown. While some buyers are taking advantage of this opportunity, others may be waiting for more significant rate cuts in the coming months. Prices are likely to rise alongside future cuts, potentially leading to a busy and competitive spring market next year.

What This Means for You

Whether you’re thinking about buying, selling, or investing, now is an important time to start planning. If interest rates continue to fall as expected, the spring of 2025 could bring a surge in market activity, which means preparing ahead of time will be key to success.

Let’s connect to discuss how these trends may impact your goals and how we can set you up for success in the months to come.