New listings of Toronto homes surge 26% on bets for lower rates

THE number of homes put up for sale in Toronto surged last month as sellers wager that falling interest rates will bring buyers back into the market.

New listings in Canada’s biggest city rose 26 per cent in January from a month earlier, according to seasonally adjusted data released on Wednesday (Feb 5) by the Toronto Regional Real Estate Board. That outpaced the 10 per cent increase in sales and helped keep a benchmark measure of home prices flat at C$1.1 million (S$1 million), the data show.

Buyers are benefiting from lower borrowing costs as the Bank of Canada lowered its benchmark rate to 3 per cent in January. Economists are forecasting further declines this year, which should boost buyer demand after two years of high prices and mortgage rates.

The Toronto real estate board is forecasting that sales will rise 12.4 per cent this year from 2024, according to a statement.

“A growing number of homebuyers will take advantage of lower borrowing costs as we move towards the 2025 spring market, resulting in increased transactions and a moderate uptick in average selling prices,” said Jason Mercer, the Toronto real estate board’s chief market analyst.

The Canadian economy is entering a precarious period as the prospect of a trade war with the US, its largest trading partner, looms. Many economists predict that a battle over tariffs would guarantee a recession.

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On Monday, US President Donald Trump said he’d delay his previously announced 25 per cent tariffs on most Canadian goods, although the reprieve is only set to last about a month. Trump has signalled he’s still looking for broader changes to the countries’ trading relationship beyond the increased border security measures that Canada has already pledged.

“The positive impact of lower mortgage rates could be reduced, at least temporarily, by the negative impact of trade disruptions on the economy and consumer confidence,” Mercer said. BLOOMBERG