Toronto’s housing market crumbles: demand plummets, inventory surges, buyers disappear—reckoning unfolds.

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The Bank of Canada’s rate cuts were intended to breathe life into Toronto’s housing market, but the outcome has been devastating. Instead of spurring demand, they have exposed deep systemic weaknesses. The latest data paints a grim picture: inventory is surging, buyers are scarce, and the market is reeling from the second-worst December in a decade.

The Greater Toronto Area (GTA) housing market in 2024 saw new listings rise sharply, up 16.4% year-over-year, far outpacing sales. This oversupply has kept prices stagnant, with the average selling price dipping to $1,117,600—a decline of less than 1% compared to 2023. Despite five consecutive rate cuts since June, bringing the interest rate to 3.25%, demand remains flatlined.

Condominium apartments bear the brunt of this slump, with a staggering 57% year-over-year drop in newly built condo sales during the first half of 2024. Oversupply has flooded the market, leaving units unoccupied and buyers hesitant. Meanwhile, ground-oriented housing showed tighter market conditions, but even this segment hasn’t escaped the stagnation.

Experts are divided on the future. Some suggest new mortgage rules and rate cuts might lure sidelined buyers, while others highlight an oversaturated market that will take years to stabilize.

Toronto’s housing market is not in correction territory; it’s facing a reckoning. Buyers’ reluctance and surging inventory signal deeper issues that rate cuts alone cannot resolve. As the city navigates this turbulent period, the resilience of its housing market faces its greatest test yet.

Rate cuts were supposed to save Toronto's housing market, but instead, they revealed the ugly truth.

Demand is dead.

Inventory is exploding.

Buyers have vanished.

The second-worst December in a decade proves it.

This isn’t a correction.

It’s a reckoning.

— Shazi (@ShaziGoalie) January 8, 2025