Nicole Lopez (00:00):
Welcome everyone to another episode of Real Estate with Nicole. I'm Nicole and I'm thrilled to have you joining me today as we dive into the vibrant and ever-changing world of real estate. Let's set the scene. Imagine a crisp spring morning and the sunlight filtering through your windows and that distinct fresh scent of new beginnings lingering in the air. It's that time of year again spring cleaning. I remember one spring when I decided to tackle my parents' basement crawlspace, a place that had become a catchall for everything. Over the years, I sorted through old boxes, unraveling so many memories and also discarding the unnecessary. I felt a profound sense of renewal and readiness for what was to come spring. Cleaning isn't just about sprucing up your home, it's about preparing yourself for new opportunities and the busy seasons ahead. Just as we declutter and refresh our living spaces, we must also prepare and position ourselves for the upcoming spring real estate market, which promises to be as dynamic and bustling as ever.
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In this episode, we'll be diving into the latest insights and updates to help you navigate the spring real estate market with confidence and clarity from understanding market trends influenced by economic factors to leveraging new tax changes that can ease your financial planning. We've got a wealth of information to share. So whether you're a first time home buyer, eager to find your dream home, or a seasoned investor looking to capitalize on new opportunities, this episode will provide you with the tools and knowledge to thrive in the spring market. So grab your notepad, get comfortable, and let's spring into action together.
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Oh, by the way, don't forget to visit our website and follow this podcast on your favorite podcast app to stay updated with the latest episodes. Let's make this spring season the most successful and exciting one yet in your real estate journey. We're diving into the latest economic insights with focus on the real estate market. So let's get started In a recent blog post by Sean Kakar of the Canadian Real Estate Association, he's a senior economist. He pointed out that something pretty interesting, or at least I thought it was interesting, that there's a big difference between the surge in new listings, so new properties coming out for sale and the drop in sales. He noted that this slowdown in sales seems to be happening right around the same time. We're seeing tariff uncertainties, which as you might guess are making buyers a bit jittery. This could mean we're heading into a cooling period in the real estate market where there's more supply than demand, ultimately leading to potential changes in pricing strategies.
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So the GTA market isn't immune to the shocks of the trade war between Canada and the us. Higher tariffs can bump up construction costs, making new homes more expensive and affecting affordability. This in turn could slow down new housing projects. So what about the impact to consumer confidence? Economic certainty can certainly really put a damper on our confidence as consumers. When buyers sense economic risks, they may hold off on purchasing or be much more cautious about investing in real estate. And we've seen this as the Bank of Canada Prime interest rates rose over the past few years. We saw buyers sitting on the sidelines waiting for interest rates to drop higher tariffs and supply chain disruptions don't exactly scream stability. So what about, I mentioned before interest rates? What about those potential shift in interest rates? Interest rates are a big deal in real estate. The ongoing trade conflict may lead to changes in monetary policies, which could shift interest rates, and this impacts mortgage affordability and buyer's ability to finance the purchases. However, the Bank of Canada recently lowered its overnight rate to 2.75%, which ultimately shows a strong support toward economic stability as inflation in Canada remains close to its 2% target.
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And while Canada's economy showed strong growth in the late 2024, the global trade tensions and evolving market conditions may slow momentum in early 2025. So we really need to be looking out for what's happening in the economy, what's happening in this tariff wars. Despite these shifts, past rate cuts have helped sustain growth and this latest adjustment is aimed at ensuring a balanced approach to inflation and economic resilience, that word stability. The bank will continue monitoring trends ahead of its next rate announcement next month on April 16th. In February, we saw a big jump in inventory levels, meaning houses listed on the market. It was up 13.8% month over month and 75% year over year. This trend gives buyers more options and may ease some competitive pressures. Sales activity also went up about 4.9%, but we're still far from the usual February figures. Sales are down 42% compared to the 10 year average, and inventory is 93% above its historical average. What does this show us? It shows us just how much things have changed in the market.
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So the trade wars impacts on construction costs, interest rates, and consumer confidence will definitely shape the GTA real estate market and landscape. While February showed growth, the long-term effects of economic uncertainties are still unfolding. Buyers, sellers, developers, and investors will need to keep a close eye on these factors in order to make smart and informed decisions about their investments. So with that, let's shift our gears and talk a little bit about the greater Toronto area or GTA real estate market in February. What are those trends look like? Despite all the economic uncertainties, the GTA's real estate market showed some notable growth. So here's the scoop in what I call short form prices went up by 4.1%, bringing the average sales price to about 1.09 million across the region, the GTA region, and that represents about a 44,000 increase in average price inventory, as I mentioned, rose by 13.8% month over month, so from January to February, and that's 75% year over year. So in the GTA we reached over 19,000 active listings, which is huge, and sales activity actually saw an increase of 4.9%, which resulted in about just over 4,000 total transactions across all property types in the greater Toronto area. However, it's not all rosy. Both inventory and sales are still far from the usual February numbers, as I mentioned earlier.
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So given the economic volatility and the dynas strategic approaches are essential for both buyers and sellers in the greater Toronto area or GTA market. So what are the takeaways? What do I suggest for buyers? More properties mean less competition. That's the short form. So buyers listen up. With a rise in supply, now might be the perfect time to check out more options in the market. More inventory means more choices for you, which could ease the competitive pressure we've seen in recent months and years. Plus staying updated on economic developments that might affect pricing and availability will help you make smarter decisions. Understanding the broader economic picture can give you an edge. Now for sellers, what do I say to you? Flexibility and proactive marketing can help you navigate market volatility. Alright, sellers, it may be time to rethink your strategies with changing dynamics and increased competition.
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Setting realistic expectations aligned with the current market conditions is key to attracting buyers. Be ready for a potentially softer pricing environment, especially in areas hit hard by tariff concerns. As I mentioned, flexibility and proactive approach to marketing your property will really make a difference in these volatile times. As always, we'll keep monitoring these developments and bring you the latest insights to help you navigate the spring real estate market With confidence, stay informed and adaptable, and both buyers and sellers can make strategic decisions that align with the evolving real estate landscape. Now let's turn to the tidbits from a Canadian revenue agency perspective.
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Dare I mention the word taxes? I did, didn't I? It's tax season and I have some tidbits to share with you. And also feel free to share this information with others who it may also apply. So as you gear up to file your 2024 income tax and benefit return, remember the deadline is approaching fast. April 30th, I'll walk you through five key updates from the CRA that you need to know to navigate the tax season confidently. First on the list are the exciting enhancements in online tax management. The CRA is revolutionizing the way you manage your tax affairs online. Thanks to the new instant document verification service registering foreign account has never been easier. No more waiting for a mailed security code. And once you're registered, you can chat live with an agent directly within your portal to get answers to your account specific questions. This is a game changer for managing your taxes efficiently. Next up, we have great news for aspiring homeowners. The boosted first time home buyer withdrawals program now allows eligible first time buyers to withdraw up to $60,000 from your registered retirement savings plan. This increased amount offers greater financial flexibility for your first home purchase, making your dream home more attainable than ever before.
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Next, for those of you who own short-term rental properties, compliance has been simplified. You're aware that you cannot deduct expenses for periods when your property was noncompliant with laws. However, there's a special exception for 2024. If your property meets municipal or provincial laws by December 31st, 2024, it will be considered compliant for the entire year. This change brings clarity and ease to managing your rental property finances. We also have some exciting news for our volunteer firefighters and search and rescue volunteers. Your is being recognized with an increased exemption amount for your credit. If you complete it at least 200 hours of service last year, 2024, the exemption amount is increasing from 3000 to $6,000. This change acknowledges your invaluable service and offers greater financial benefits. Thank you for your incredible service. Lastly, the CRA is introducing simple file services tailored to lower income individuals. You may soon receive an invitation to file your tax return securely either over the phone or digitally.
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This initiative aims to simplify the filing process, ensuring accessibility for those who need it most. For more detailed information about these changes and others for this tax season 2024, visit canada.ca/taxes. What's new? Stay informed and prepared to navigate these updates confidently as you approach the tax filing deadline. So as the GTA real estate market continues to navigate economic uncertainties from the trade war, staying informed and adaptable is key. By monitoring market trends, understanding the impact of higher tariffs and making strategic and well-informed decisions, buyers and sellers can align their actions to the evolving landscape. In the months ahead, we'll see how the trade conflict affects housing prices, inventory levels, and mortgage rates. Thank you for tuning in and remember, staying informed can help you make informed decisions for your real estate investments. Until next time, this is Nicole. This wishing you happy house hunting and selling.
