As we move further into 2025, supply will be a crucial factor to watch in the real estate market. January saw a surge in new listings, largely due to a significant number of homes that were pulled from the market late last year and have now returned. However, there’s another key element influencing the market this year: mortgage renewals.
Approximately 400,000 mortgages in the Greater Toronto Area (GTA) are up for renewal in 2025, and many of these homeowners will face significantly higher interest rates than their original contracts. This will likely lead to more listings as people adjust to the new financial landscape.
What This Means for Buyers
While the economic and political uncertainties may persist, buyers should start considering re-entering the market, especially as we approach the spring season. Interest rates are expected to continue falling, which will help stabilize the market and create new opportunities for potential homeowners.
In fact, the Bank of Canada recently made another rate cut of 25 basis points on January 29, bringing the rate to 3.0%. This marks the sixth consecutive rate cut, with 5-year bond yields dropping below 3%, making fixed-rate mortgages more affordable and bringing them below the 4% mark.
The Bank of Canada also highlighted the potential economic challenges a trade war with the U.S. could bring, prompting the need for lower interest rates to help stabilize the economy.
What This Means for Sellers
If you're thinking about selling this year, it’s important to understand how to position yourself in this shifting market. With more listings expected due to mortgage renewals and falling interest rates, there may be new opportunities for sellers, but also increased competition.
Let’s Discuss Your Strategy
If you’re ready to make a move, whether you’re buying or selling, I’m here to help you navigate this evolving market. Let’s talk about how you can make the most of these changes and set yourself up for success in 2025.