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We now know the results from the first rate cut on the real estate market… drum roll please ….. not that much. To be honest I think we all knew that this would be the result of one rate cut. A quarter-point reduction does not amount to a lot. To see a meaningful impact, we’ll need to stack several rate cuts on top of one another to provide an impactful difference. The key part is that buyers now know that things get less expensive in the short and medium term, which helps with their actual intention to move forward.

June 2024 saw fewer home sales than we had in June 2023. This resulted in a slight average selling price drop to last year however it depends on your home type to know what’s happening. Low-rise homes are about flat from last year and in condos, we’ve seen a bit of a price decrease as more supply continues to come on the market.

What we did see with the rate cut is a number of homeowners bringing their homes on the market in anticipation of more buyers coming forward. This has resulted in a lot of great options for buyers. It’s also resulted in a bit of a mismatch in demand/supply and has brought a little more negotiation power to the buyers. I would expect to see this start to balance out over the next few months as sellers in the GTA tend to be very sticky on their selling prices. Many will opt to take their homes off of the market and wait a little longer rather than reduce pricing to sell. The exception is in the condo market where there seems to be a higher need to sell among investors, who in many cases are in a negative carry situation and just want out.

Ultimately there is a fundamental shortage of homes in the GTA. As interest rates continue to reduce over the next 6 – 18 months I’d expect the market to move back to a seller’s market as the supply of new homes has also dropped significantly over the past 18 months.

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