Greater Toronto Home Sales in August

OTTAWA (Reuters) – Greater Toronto-area home sales rose in August on a month-to-month basis, showing a rebound from a drop in July.

Seasonally adjusted sales increased 0.6% in August after a decline of 0.8% in July, according to data from the Toronto Regional Real Estate Board (TRREB). This rise marks only the third monthly increase in the last eight months, as per TRREB data.

Average home prices dropped 0.8% last month to C$1.12 million (approximately $815,178), ending a six-month streak of rising prices, while new listings decreased by 1.6%.

Housing economists have predicted a gradual decline in home prices as new listings increase, particularly as some homeowners burdened with high interest rates look for an exit to avoid mortgage defaults.

This trend typically begins in Toronto, Canada’s largest city, which accounts for two-thirds of Canada’s condominium sales and serves as an indicator for other major metropolitan areas.

The central bank recently cut its key policy interest rate by 25 basis points for the third consecutive time, lowering it to 4.25%. Money markets anticipate a nearly 100% chance of another 25-basis-point cut in October, followed by one in December, potentially reducing interest rates to 3.75% by year’s end.

Despite these rate cuts, buying activity in Toronto’s housing market has not surged, as potential buyers await further reductions. TRREB President Jennifer Pearce stated, “As mortgage rates continue to trend lower this year and next, we should experience an uptick in first-time buying activity, including in the condo market.”

On a year-over-year basis, sales fell by 5.3% last month, while new listings increased by 1.5% annually.