The Greater Toronto Area (GTA) real estate market continued to provide substantial choice for home buyers in February 2025, as resale inventory remained high while sales declined significantly compared to the previous year. With mortgage rates still elevated, affordability challenges persisted, but market experts anticipate improvements as borrowing costs are expected to drop later this year.

According to the Toronto Regional Real Estate Board (TRREB), home sales in February 2025 totaled 4,037 transactions, representing a 27.4% year-over-year decline. Meanwhile, new listings rose 5.4% YoY to 12,066, reinforcing buyer-friendly conditions with increased housing inventory.

Key Highlights of GTA’s February 2025 Housing Market

GTA Homebuyers Gain Negotiation Power Amid Market Slowdown

The GTA housing market in February 2025 clearly favoured buyers over sellers. The significant increase in available listings, combined with reduced sales, meant that buyers had greater negotiating power when making offers.

TRREB President Elechia Barry-Sproule acknowledged that while many GTA residents are eager to purchase homes, higher mortgage rates continue to impact affordability. However, she expressed optimism that borrowing costs could decline in the coming months, making homeownership more accessible.

“Many households in the GTA are eager to purchase a home, but current mortgage rates make it difficult for the average household income to comfortably cover monthly payments. Fortunately, we anticipate a decline in borrowing costs, which should improve affordability.”

With economic uncertainty still lingering—especially due to concerns over Canada’s trade relationship with the U.S.—many potential homebuyers are choosing to wait and see before making a purchase decision.

TRREB Chief Market Analyst Jason Mercer highlighted this sentiment, stating that if economic conditions stabilize and borrowing costs decrease, the second half of 2025 could see a rebound in sales activity.

“If trade uncertainty is alleviated and borrowing costs continue to trend lower, we could see much stronger home sales activity later this year.”

Home Prices Decline: What It Means for Sellers & Buyers

In addition to lower sales volume, GTA home prices also experienced a moderate decline in February 2025:

• The MLS® Home Price Index (HPI) Composite Benchmark declined by 1.8% YoY
• The average selling price fell 2.2% YoY to $1,084,547

On a seasonally adjusted basis, both the HPI Composite Benchmark and the average home price dropped slightly compared to January 2025, signaling a continued cooling in the market.

For Home Sellers:

• Sellers must price homes competitively to attract buyers in the current environment.
• Longer listing times are likely, as more inventory means buyers have multiple options.

For Home Buyers:

• More inventory = more choices and stronger negotiation power.
• Lower prices + potential rate cuts = improved affordability in the coming months.

Market Outlook: What to Expect in the Coming Months

Several key factors will shape the GTA housing market in 2025:

1. Interest Rate Cuts Could Revive Market Activity

Experts predict that Canada’s central bank may start cutting interest rates in mid-to-late 2025, which could lead to a surge in buyer demand. Lower rates will make mortgage payments more manageable, increasing housing affordability.

2. Economic & Trade Uncertainty Remains a Concern

Ongoing trade negotiations with the U.S. and overall economic stability will impact consumer confidence. If trade relations improve and economic uncertainty diminishes, more buyers may enter the market.

3. Policy Changes on Housing Supply & Affordability

With the Ontario provincial election behind us and federal policies in flux, housing supply and affordability remain hot-button issues. TRREB CEO John DiMichele emphasized the need for clear government direction:

“Policy makers need to clarify their plans for housing supply and affordability, as well as trade and economic strategies. Clear direction will go a long way to strengthen consumer confidence.”

4. Potential for a Stronger Second Half of 2025

If interest rates decrease and economic confidence rebounds, the GTA real estate market may experience a surge in sales activity in late 2025. Buyers who are currently waiting on the sidelines may re-enter the market, leading to increased competition.

Final Thoughts: Is Now a Good Time to Buy in GTA?

While February 2025 presented challenges for home sellers, it provided opportunities for buyers. With a higher inventory of listings, softer pricing, and the potential for lower interest rates, buyers may find favorable conditions to purchase homes in the GTA.

For Sellers: Pricing competitively and being patient will be key to securing a sale.

For Buyers: Now is the time to explore options and prepare for potential mortgage rate decreases later in the year.

As the market evolves, keeping an eye on mortgage rate trends, economic conditions, and government policy decisions will be essential for anyone planning to buy or sell in the GTA real estate market.

Check Out My Current Listings Below!

Frequently Asked Questions (FAQs)

1. Why did GTA home sales decline in February 2025?

Home sales dropped 27.4% YoY due to high mortgage rates, economic uncertainty, and cautious buyer sentiment amid trade concerns.

2. Are home prices expected to drop further in 2025?

While prices dipped in February 2025, future trends will depend on interest rate cuts and economic conditions. A rebound is possible in late 2025 if borrowing costs decrease.

3. Is now a good time to buy a home in GTA?

Yes, buyers currently have strong negotiating power, a higher selection of listings, and may benefit from potential rate cuts later in 2025.

4. What impact will lower interest rates have on the housing market?

Lower rates will increase affordability, potentially leading to higher sales activity and price stabilization later in the year.

5. What should sellers do in the current market?

Sellers should price competitively, stage homes effectively, and be prepared for longer listing times due to increased inventory.

6. How does government policy impact the real estate market?

Housing policies on supply, affordability, and economic stability significantly influence market trends and consumer confidence.

The real estate market inside scoop for the community you love. See homes that are for sale and have recently sold. Find out if home sales in your neighbourhood are trending up or down. See what homes around you are currently selling for.

Discover Modern Elegance in Countryside Pointe: A Stunning 2-Year-Old Semi-Detached Home

If you’re searching for a home that combines modern elegance, energy efficiency, and a serene setting, look no further than this exquisite 2-year-old semi-detached home in the newly created subdivision of Countryside Pointe in Uxbridge, Ontario. Designed with timeless aesthetics and thoughtful features, this property offers the perfect blend of style, functionality, and sustainability. Let’s take a closer look at what makes this home so special.

A Timeless Exterior

From the moment you arrive, the home’s captivating blend of brick, stone, and stucco exterior commands attention. The architectural details, including brick arches, decorative stone accents, and soldier coursing, create a sophisticated curb appeal. The maintenance-free aluminum soffit, fascia, and eaves troughs ensure durability, while the premium sectional roll-up garage door with decorative windows adds a touch of elegance.

The professionally graded and sodded lot is complemented by precast slab walkways and steps, leading you to the brushed nickel front door. Coach lamps at the garage and front door, along with an exterior light fixture at the rear door, provide both functionality and charm.

Step Inside: A Spacious and Inviting Interior

As you step into the spacious foyer, you’re greeted by soaring ceilings and a graceful oak staircase with upgraded spindles. The main level features a harmonious blend of hardwood floors and ceramic tiles, accentuated by 9-foot ceilings that create an open and airy atmosphere.

The open-concept kitchen is a chef’s dream, complete with a centre island, stainless-steel sink, and quality cabinetry selected from the vendor’s standard samples. The kitchen seamlessly flows into the living and dining areas, making it an ideal space for entertaining. A gas fireplace with a white-painted mantel and marble surround adds warmth and ambiance, while a sliding patio door leads to the wooden deck, offering breathtaking views of the fully fenced backyard and expansive farmland beyond.

Upstairs: Comfort and Convenience

The second floor is designed with comfort and practicality in mind. Three generously sized bedrooms, each adorned with luxurious high-end carpeting, provide ample space for relaxation. The master ensuite is a true retreat, featuring a double sink vanity, an oval tub, and a shower with a standard marble surround.

A conveniently located laundry room adds to the functionality of this floor plan, making everyday tasks a breeze. The second floor also features stippled ceilings with smooth borders, adding a touch of sophistication to the space.

Unfinished Basement: Endless Possibilities

The unfinished basement is a blank canvas waiting for your personal touch. With 8-foot ceilings, a rough-in for a full 4-piece bathroom, and its own entrance, this space is ideal for creating a secondary living suite, home gym, or recreational area. The poured concrete basement walls are damp-proofed and wrapped with R20 insulation, ensuring durability and energy efficiency.

Energy-Efficient Features

This home is equipped with a range of energy-saving features, including:

• An upgraded on-demand hot water system for efficiency and convenience.
• An ERV/HRV system for optimal temperature control and indoor air quality.
• A heat recapture coil for water, further enhancing sustainability.
• High-efficiency forced gas central heating and a rough-in for central air conditioning.
• R60 attic insulation, R24 exterior wall insulation, and R20 basement insulation wrap.
• Energy Star certification, ensuring the home meets the highest standards of energy efficiency.

Quality Construction and Finishes

Built with quality construction and attention to detail, this home features:

• Poured concrete basement walls with additional foundation wrap for enhanced water resistance.
• Steel post and beam construction for added durability.
• Engineered truss-joist floor systems to minimize the need for structural posts.
• 2×6 wood frame construction and fully sealed windows and exterior doors for superior insulation.

Additional Features

• A direct access man door from the garage to the main floor hallway for added convenience.
• Two exterior water taps, one in the garage and one at the rear of the home.
• White switches and receptacles throughout, with ground fault interrupter protection in all bathroom electrical outlets.
• Rough-ins for central vacuum, cable TV, and telephone in key areas.

Live the Dream in Countryside Pointe

This stunning 2-year-old semi-detached home offers the perfect combination of modern comfort, energy efficiency, and serene living in the beautiful community of Countryside Pointe. Whether you’re entertaining guests in the open-concept living space, enjoying the tranquility of the backyard, or customizing the unfinished basement to suit your needs, this home is designed to meet the demands of modern living.

Don’t miss the opportunity to make this exceptional property your own. Schedule a viewing today and experience the elegance and functionality of this remarkable home.

For more information or to arrange a private showing, contact me at Gerald-Lawrence@ColdwellBanker.ca. Your dream home awaits!

The real estate market inside scoop for the community you love. See homes that are for sale and have recently sold. Find out if home sales in your neighbourhood are trending up or down. See what homes around you are currently selling for.

Ottawa, Ontario (October 8, 2024) – To address Canada’s housing shortage, the federal government is taking steps to unlock underutilized properties. This includes making it easier for homeowners to add secondary suites and repurposing vacant federal lands. Deputy Prime Minister and Minister of Finance Chrystia Freeland, along with Ministers Jean-Yves Duclos and Terry Beech, announced significant progress in these initiatives.

Federal Government Takes Bold Steps to Unlock Housing Supply

Ottawa, Ontario (October 8, 2024) – Today, the federal government announced a series of measures aimed at accelerating housing construction and increasing affordability. These initiatives will unlock underutilized properties, simplify regulations, and provide financial incentives to stimulate housing development.

Expanding Homeownership Opportunities

• Secondary Suites and Mortgage Refinancing: The government is introducing new measures to encourage the construction of secondary suites. These include:
  • Mortgage Refinancing: Homeowners will be able to refinance their mortgages to fund the construction of secondary suites, with up to 90% financing available and amortization periods of up to 30 years.
  • Increased Mortgage Insurance Limit: The maximum insurable mortgage amount for secondary suite refinancing will be increased to $2 million, ensuring access to financing in all housing markets.
• Canada Secondary Suite Loan Program: This program will provide low-interest loans to homeowners to support the construction of secondary suites.

Unlocking Vacant Land

• Vacant Land Tax: The government is launching consultations on a potential federal vacant land tax. This tax would incentivize landowners to develop their properties and increase housing supply.
• Canada Public Land Bank: An additional 14 underutilized federal properties have been identified for residential development, bringing the total number of available properties to 70.

Building a More Affordable Future

By implementing these measures, the federal government is taking significant steps to address Canada’s housing shortage and make housing more affordable for all Canadians. By unlocking underutilized properties, simplifying regulations, and providing financial support, the government is creating a more sustainable and equitable housing market.

The real estate market inside scoop for the community you love. See homes that are for sale and have recently sold. Find out if home sales in your neighbourhood are trending up or down. See what homes around you are currently selling for.

“We must use every possible tool to build more homes and make housing affordable for every generation of Canadians. That is why we announced the most ambitious housing plan in Canada’s history—a plan to build 4 million new homes. Today, we are taking bold action to deliver on key parts of that plan which will build new homes by making it easier to add a secondary suite to your existing home and making full use of available land in our communities.”

– The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

“Safe, accessible, and affordable housing options are out of reach for far too many Canadians. The launch of the Canada Public Land Bank in August 2024 laid the foundation for our efforts to unlock public lands for housing at a pace and scale not seen in generations. We are delivering on our promise to continue to add more properties to the land bank and meet the deliverables outlined in Budget 2024 to support a new, ambitious Public Lands for Homes Plan. In doing so, we can build strong communities and more affordable housing across the country.”

– The Honourable Jean-Yves Duclos, Minister of Public Services and Procurement 

“Our government is unlocking new opportunities for homeownership by building homes on underused public lands, retrofitting federal buildings, and empowering homeowners to construct additional units. Young British Columbians and Canadians across the country face a tougher housing market than the generations before them and our plan will help create more housing options for them and their families.”

– The Honourable Terry Beech, Minister of Citizens’ Services

“The measures announced today are another step forward in our work to tackle the housing crisis, build more homes, and ensure that everyone has a safe and affordable place to call their own.”

– The Honourable Sean Fraser, Minister of Housing, Infrastructure and Communities

• Today’s mortgage reforms to make it easier for homeowners to add secondary suites, such as basement apartments, in-law suites, and laneway homes, build on the federal government’s recent announcement of the boldest mortgage reforms in decades to unlock homeownership for every generation of Canadians. Starting December 15, 2024, Canadians will be able to apply for reformed mortgages and benefit from lower monthly payments. These reforms include:
  • Increasing the $1 million price cap for insured mortgages to $1.5 million, to reflect current housing market realities and help more Canadians qualify for a mortgage with a downpayment below 20 per cent. Increasing the insured-mortgage cap—which has not been adjusted since 2012—to $1.5 million will help more Canadians buy a home.
  • Expanding eligibility for 30 year mortgage amortizations to all first-time homebuyers and to all buyers of new builds, to reduce the cost of monthly mortgage payments and help more Canadians buy a home. By helping Canadians buy new builds, including condos, the government is announcing yet another measure to incentivize more new housing construction and tackle the housing shortage. This builds on the Budget 2024 commitment, which came into effect on August 1, 2024, permitting 30 year mortgage amortizations for first-time homebuyers purchasing new builds, including condos.

• In addition to reforming mortgage insurance rules to make it easier to add secondary suites, the federal government is:
  • Helping families afford to have a grandparent or a family member with a disability move back in if they want to with a new, refundable Multigenerational Home Renovation Tax Credit of up to $7,500, available as of January 1, 2023; and,
  • Launching a new Canada Secondary Suite Loan Program to enable homeowners to access low-interest loans to help with the cost of renovations. More details will be announced before the end of the year.

• In Budget 2024 and Canada’s Housing Plan, the federal government announced the most ambitious housing plan—a plan which will build nearly 4 million homes by 2031. This plan takes a whole-of-government approach to addressing the housing crisis by building more homes, making it easier to rent or own a home, and helping Canadians who cannot afford a home.
  • A key component of Canada’s Housing Plan is the Public Lands for Homes Plan, which will build 250,000 new homes by partnering with all order of government, homebuilders, and housing providers to build homes on surplus and underused public lands, such as unused federal offices, across the country.
  • Budget 2024 provided $500 million to launch the new Public Lands Acquisition Fund, which will buy land from other orders of government to allow the federal government to acquire more land to be used for housing to help build middle-class homes. Work on the fund is already underway, and more details will be released in the coming weeks.

• The 14 federal properties added today to the Canada Public Land Bank are located in:
  • Vernon, British Columbia;
  • Ottawa, Ontario;
  • Gatineau, Quebec;
  • Québec City, Quebec;
  • Cape Breton, Nova Scotia; and,
  • St. John’s, Newfoundland and Labrador.

• Provinces, territories, and municipalities that choose to implement vacant land taxes would be incentivized to design these taxes around a core tax base of land that is:
  • Vacant;
  • Residentially (or mixed-use) zoned;
  • Serviceable by municipal infrastructure (e.g., roads, water, sewage, and electricity); and,
  • Physically developable (e.g., appropriate lot size, no site contamination)

• Applying specialized taxes on vacant land would be intended to:
  • Encourage the development of land into housing rather than leaving it idle;
  • Discourage speculative holding of land by making it more costly to keep land undeveloped; and,
  • Provide a source of revenue, which could potentially be used to fund further investments to build more homes.

The real estate market inside scoop for the community you love. See homes that are for sale and have recently sold. Find out if home sales in your neighbourhood are trending up or down. See what homes around you are currently selling for.

Toronto Regional Real Estate Board (TRREB) data reveals a significant year-over-year increase in GTA home sales for October 2024. While new listings also rose, the pace was slower, leading to tighter market conditions compared to the previous year.

Despite a slight annual increase in the average selling price to $1,135,215, TRREB President Jennifer Pearce attributes the uptick in sales to the Bank of Canada’s rate-cutting cycle and improved affordability. “Lower borrowing costs and relatively flat home prices have encouraged more buyers to enter the market,” she said.

TRREB Chief Market Analyst Jason Mercer notes that while October saw tighter market conditions, ample inventory ensures continued buyer choice and moderate price growth in the near term. However, as inventory is absorbed and construction lags population growth, price acceleration is anticipated for spring 2025.

To further enhance affordability, TRREB CEO John DiMichele advocates for policy measures like the Conservative Party’s proposed GST removal for new homes under $1 million. He also suggests phasing out the rebate between $1 million and $1.5 million for markets like the GTA and Vancouver, and calls for provincial alignment with this proposal.

Bank of Canada Cuts Interest Rates For The Fourth Time This Year So Far!

Today, the Bank of Canada lowered its key interest rate to 3¾%. This means the Bank Rate is now at 4%, and the deposit rate is also at 3¾%.

Inflation has been on the decline, with the Consumer Price Index (CPI) currently around 2%. This drop is due to lower energy prices and a general easing of underlying inflationary pressures. While inflation is close to the Bank’s target of 2%, the distribution of inflation rates across different goods and services is still uneven.

The Bank of Canada expects inflation to remain near its target over the next few years. Core inflation, which excludes volatile items like food and energy, is forecast to gradually decrease. However, there are risks that inflation could either rise above or fall below the target.

Canada’s economy has performed largely as expected. It grew slightly faster than anticipated in the second quarter but is expected to slow down in the third quarter. Overall, the economy is still producing more goods and services than are being demanded. The job market has weakened, especially for newcomers and young people. Wages are rising faster than productivity.

The Bank of Canada forecasts Canada’s economy to grow at an average rate of 2¼% over the next two years. This is due to expected increases in consumer spending and business investment, supported by lower interest rates. However, slower population growth and rising consumption per person will partially offset this growth. Export demand is also expected to remain strong.

The global economy is projected to grow at around 3% over the next few years. The United States is experiencing strong economic growth, but it is expected to slow down. In the euro area, growth is sluggish but expected to improve. Inflation in advanced economies is expected to be close to central bank targets. China’s economy has slowed due to weak domestic demand and the ongoing property crisis. However, new stimulus measures should help prevent further decline.

The weaker Chinese economy has reduced demand for oil. Global oil prices have fallen and remain volatile due to concerns about supply, demand, and the conflict in the Middle East.

Recent Data

The Bank of Canada’s Rate Cut – Wednesday September 4, 2024

The Bank of Canada has once again adjusted its monetary policy. In a move aimed at stimulating economic growth and combating inflationary pressures, the bank has reduced its target for the overnight rate to 4¼%. This decision is part of a broader strategy to normalize the balance sheet and maintain a healthy economic equilibrium.

Globally, the economy continues to exhibit mixed signals. While the United States and Eurozone have shown signs of resilience, China’s economic growth has been hampered by weak domestic demand. Despite these regional variations, inflation rates have generally been moderating. In Canada, the economy expanded by 2.1% in the second quarter, driven primarily by government spending and business investment. However, recent data suggests a slowdown in economic activity, and the labor market has been sluggish.

Inflation in Canada has been on a downward trajectory. In July, the consumer price index rose by 2.5%, marking a significant decline from previous months. While shelter price inflation remains a contributing factor, it is showing signs of easing. The Bank of Canada’s preferred measures of core inflation have also stabilized around 2½%.

Given the ongoing moderation in inflationary pressures and the persistent excess supply in the economy, the Governing Council has decided to lower the policy interest rate by an additional 25 basis points. This decision reflects a careful assessment of the opposing forces influencing inflation and is guided by the latest economic data. The Bank remains committed to restoring price stability for Canadians.

The next announcement regarding the overnight rate target is scheduled for October 23, 2024. At that time, the Bank will also release its updated Monetary Policy Report, providing a comprehensive outlook for the economy and inflation.

The real estate market inside scoop for the community you love. See homes that are for sale and have recently sold. Find out if home sales in your neighbourhood are trending up or down. See what homes around you are currently selling for.

Here are some stats on the benefits of home ownership. For example, let’s say you have a $500,000 30-year mortgage with an 8% interest rate. Your monthly payment would be approximately $3,700 a month. Making one extra payment of $3,700 a year would cut your mortgage by 7 years and save you up to $220,000 in interest.

Some people make their payments every two weeks, and that’s how they get the extra payment a year. If you have a larger mortgage balance than 500,000, the payment is bigger but the savings will be too. This is just one way you can create more equity in your home.

Another interesting fact is that owning a home is a hedge against inflation. For example, here’s the purchasing power of $10,000 over time.

            1964: $10,000

            1984: $3,072

            2004: $1,663

            2024: $1,002

That same 10,000 down on a 100,000 property in 1963 over time

            1964: $100,000

            1984: $323,163

            2004: $600,249

            2024: $1,029,289

That’s a million-dollar difference!

So not only is your home a great hedge against inflation, but you can also increase equity by paying an extra principal and reducing the life of your loan.

Give me a call if you’d like to learn what your next real estate steps should be.

The real estate market inside scoop for the community you love. See homes that are for sale and have recently sold. Find out if home sales in your neighbourhood are trending up or down. See what homes around you are currently selling for.

It’s rare for most people to remain in the same home throughout their adult lives. Sometimes, a growing family needs a larger home. Or it could be kids moving out on their own, leaving parents with a space that’s too big for their lifestyle.

Choosing to upsize — or downsize — can be an emotional, as well as logistical, decision. If you’re at that point in your life, the information above will help you start thinking about that process and make it a little less daunting.

I belong to a large network of real estate professionals across North America so if you’re ready to move onto the next stage of your life — local or not — I can help you find the home of your dreams. Let’s set up a time to chat and start the conversation!

With the options made available through new housing legislation, municipal efforts in changing by-laws as well as advanced building technology that allows fully off-grid and semi off-grid options available to people on rural or unserviced lots, this is an opportunity however small for buyers to consider. Please reach out to me to discuss more.

Get an Instant FREE Home Value Estimate in 10 seconds at QuickHomeValues.ca

TORONTO, ONTARIO, August 6, 2024 – The Greater Toronto Area (GTA) housing market saw an increase in sales compared to July 2023. While this is positive news, buyers continue to have more options due to a significant rise in new listings. As a result, average selling prices have eased slightly.

TRREB President Jennifer Pearce attributes the sales uptick to recent Bank of Canada interest rate cuts and anticipates further sales growth as borrowing costs decrease. July sales reached 5,391, a 3.3% increase year-over-year, while new listings jumped 18.5% to 16,296. Despite these increases, both sales and new listings dipped on a month-over-month basis.

Average selling prices dropped 0.9% year-over-year to $1,106,617, and the MLS® Home Price Index Composite fell by approximately 5%. However, both measures saw slight increases compared to June on a seasonally adjusted basis.

TRREB Chief Market Analyst Jason Mercer predicts that home prices will remain relatively flat as buyers take advantage of lower mortgage payments and the ample inventory. However, he warns that market conditions could tighten as inventory is absorbed without a substantial increase in new home completions, potentially leading to renewed price growth.

TRREB CEO John DiMichele emphasizes the need for innovation in new home construction and applauds Toronto City Council’s decision to consult on adopting single egress stair requirements for multi-residential buildings up to four storeys. He also highlights the importance of public transit and expresses enthusiasm about the upcoming Crosstown LRT opening.

Get an Instant FREE Home Value Estimate in 10 seconds at QuickHomeValues.ca

Monetary Policy Decision

The Bank of Canada today lowered its policy interest rate by 25 basis points. The overnight rate target is now 4½%, with the Bank Rate at 4¾% and the deposit rate at 4½%. The Bank will continue to normalize its balance sheet.

Global Economy

Global economic growth is projected to remain steady at around 3% through 2026. While inflation is still elevated in most advanced economies, it is gradually declining. The US economy is slowing as expected, with consumer spending moderating and inflation easing. The euro area is recovering from a weak 2023. China’s economy is growing modestly,supported by exports despite weak domestic demand. Global financial conditions have improved, with lower bond yields,higher stock prices, and strong corporate borrowing. Oil prices and the Canadian dollar have remained relatively stable compared to the Bank’s April forecast.

Canadian Economy

Canada’s economy likely grew by about 1½% in the first half of 2024. However, with strong population growth, the economy is operating below capacity, leading to excess supply. Household spending, including on housing, has been weak. The labour market is softening, with rising unemployment, slower job growth, and longer job search durations.Wage growth is moderating but remains elevated.

Looking ahead, the Canadian economy is expected to strengthen, supported by rising exports and increased business and household spending as borrowing costs decline. Housing investment will also grow significantly. However, slower population growth in 2025 will temper economic expansion. Overall, GDP is forecast to grow by 1.2% in 2024, 2.1% in 2025, and 2.4% in 2026. This gradual strengthening will help reduce excess supply in the economy.

Inflation

Inflation eased to 2.7% in June, reflecting broader price pressures declining. The Bank’s core measures of inflation have been below 3% for several months, and the overall pattern of price increases is returning to normal levels. However,shelter costs, driven by rent and mortgage interest, continue to contribute significantly to overall inflation. Inflation in services related to wages, such as restaurants and personal care, is also elevated.

The Bank expects core inflation to slow to around 2½% in the second half of 2024 and continue to decline in 2025. Total inflation is forecast to fall below core inflation later this year due to temporary factors affecting gasoline prices. As these factors dissipate, inflation may rise slightly before stabilizing around the 2% target next year.

Monetary Policy Outlook

Given the easing of broad price pressures and the expected decline in inflation towards the 2% target, the Bank has reduced the policy interest rate by 25 basis points. While excess supply is helping to reduce inflation, price pressures in some areas, particularly shelter and certain services, are persistent. The Bank will carefully monitor these opposing forces and adjust monetary policy as needed to achieve the 2% inflation target.

Information Note

The next interest rate announcement is scheduled for September 4, 2024. The Bank will release its next full economic and inflation forecast on October 23, 2024.

Impact of the Bank of Canada’s Decision on Mortgage Qualifiers in the GTA

The recent interest rate cut by the Bank of Canada is generally positive news for Canadians looking to qualify for a mortgage. Lower interest rates typically mean lower mortgage payments, making it easier for potential homebuyers to meet the qualifying criteria.

However, the situation is more complex in the GTA, where housing prices remain exceptionally high. While a lower interest rate can improve affordability, it’s essential to consider the following factors:

Positive Impacts:

• Lower Mortgage Payments: With lower interest rates, monthly mortgage payments will decrease, freeing up more disposable income for potential homebuyers.
• Increased Borrowing Power: Lower rates can potentially increase borrowing capacity, allowing buyers to qualify for larger mortgages.

Challenges Persisting in the GTA:

• High Housing Prices: Even with lower interest rates, the overall cost of purchasing a home in the GTA remains a significant barrier for many.
• Stricter Mortgage Qualification Rules: While interest rates have decreased, the stress test for mortgage qualification remains in place, which can limit borrowing capacity.
• Competition: The GTA housing market is highly competitive, and even with improved affordability, securing a home can be challenging.

Overall Outlook:

While the interest rate cut is a step in the right direction, it’s unlikely to dramatically change the housing market in the GTA. Prospective homebuyers will still face significant challenges due to high prices and competition.

To improve your chances of qualifying for a mortgage in the GTA:

• Increase Your Down Payment: A larger down payment can significantly improve your mortgage affordability.
• Improve Your Credit Score: A good credit score can help you secure better interest rates.
• Shop Around for Mortgage Rates: Compare offers from different lenders to find the best deal.
• Consider Alternative Housing Options: Explore options like condos or townhouses, which may be more affordable than detached homes.

It’s crucial to consult with a mortgage broker to assess your specific financial situation and explore your options. They can help you understand the impact of the interest rate change on your ability to qualify for a mortgage in the GTA.

Greater Golden Horseshoe Real Estate Report by Gerald Lawrence