Home sales in the Greater Toronto Area (GTA) saw a modest increase in August, following a decline in July, according to data released by the Toronto Regional Real Estate Board (TRREB) on Thursday. Seasonally adjusted sales rose by 0.6% in August, reversing the 0.8% drop recorded the previous month. This marks only the third monthly sales increase in the past eight months.
Despite the uptick in sales, average home prices in the region fell by 0.8% to C$1.12 million ($815,178), breaking a six-month streak of rising prices. Additionally, new listings dropped by 1.6% in August, reflecting tighter inventory in the market.
Real estate experts have predicted that home prices may gradually decline as more listings emerge, driven by homeowners facing financial pressure from high interest rates. This trend, often seen first in Toronto, is seen as a precursor to broader market shifts in other major Canadian cities.
On Wednesday, the Bank of Canada cut its key interest rate by 25 basis points for the third consecutive time, bringing it down to 4.25%. Markets are anticipating further cuts, with rates potentially falling to 3.75% by the end of the year.
Despite the rate reductions, TRREB noted that buying activity remains subdued, as many potential buyers wait for rates to drop further. However, TRREB President Jennifer Pearce expressed optimism that lower mortgage rates could stimulate more first-time buyer activity in the coming months, particularly in the condo market.
Year-over-year, home sales in the GTA were down 5.3% in August, while new listings rose by 1.5% compared to the same period last year.
