Stay informed with South Ontario real estate market updates, featuring detailed insights into key regions like Kitchener, Milton, Toronto & much more. This playlist provides monthly updates on home prices, sales activity, and mortgage trends to help you navigate the evolving real estate landscape.
Learn how factors like mortgage rate changes, economic shifts, and potential legislative updates, such as the proposed capital gains tax, are shaping the market in South Ontario. Whether you’re buying, selling, or investing, our expert analysis highlights the opportunities and challenges for homeowners and investors.
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South Ontario Market Update For Jan 2025
The Numbers
The Southwestern Ontario real estate market experienced modest growth in the fourth quarter of 2024, with prices and sales generally higher than in December 2023. Kitchener saw an 8% year-over-year increase in average sale price, while Milton rose 4%. London was an outlier, with price growth under 1% and a decline in sales. Most areas reported increased activity, including a 16% rise in homes sold in Kitchener.
Interest Rates
This growth was primarily fueled by lower mortgage rates. The Bank of Canada’s 2024 five-rate cuts dramatically lowered variable mortgage rates. Looking ahead, the Bank of Canada is expected to continue cutting rates gradually in 2025. A Reuters poll shows 80% of analysts anticipate a 25-basis-point cut on January 29, though better-than-expected December job numbers could lead to a pause. Last year, declining bond yields reduced fixed rates. However, rising bond rates in December may prevent further fixed-rate decreases. Variable rates are becoming more competitive than fixed rates, reflecting historical trends.
Capital Gains
Uncertainty lingers over a proposed capital gains tax increase announced in June 2024. The legislation would raise the inclusion rate from 50% to 66% on annual gains over $250,000, impacting long-term investors. While the law is pending, the CRA suggests paying at 66%, with potential refunds if it doesn’t pass. Delaying payment risks penalties and interest if it passes. This situation is a bit of a mess.
Predictions
Market forecasts for 2025 point to modest growth and slightly higher sales. Early January indicators have been good, with increased buyer interest and sales compared to last year, setting an optimistic tone for the year ahead.
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