Toronto Home Sales Increase in August Following July Decline; Prices Decrease, Reports Reuters

OTTAWA (Reuters) – Home sales in the Greater Toronto area experienced a slight uptick in August compared to the previous month, marking a recovery after a decline in July.

According to data from the Toronto Regional Real Estate Board (TRREB), seasonally adjusted sales increased by 0.6% in August, a rebound from the 0.8% drop observed in July. Notably, this increase represented only the third monthly rise in the past eight months.

The average price of homes fell by 0.8% last month, bringing it down to C$1.12 million (approximately $815,178) and ending a six-month period of rising prices. Meanwhile, new listings dropped by 1.6%, as reported by TRREB.

Housing economists and real estate professionals anticipate that home prices will gradually decline as new listings increase. Many homeowners, facing elevated interest rates, are likely to seek an exit option to prevent defaulting on their mortgages.

Toronto, as Canada’s largest city, often sets the trend for the housing market in the country. The city is responsible for two-thirds of Canada’s condominium sales and is a key indicator for other major metropolitan areas.

In a recent monetary policy decision, the central bank reduced its key interest rate by 25 basis points for the third consecutive time, lowering it to 4.25%. Financial markets are indicating nearly a 100% likelihood of another 25-basis-point cut in October, followed by a further reduction in December, potentially bringing rates down to 3.75% by the end of the year.

Despite these rate cuts, TRREB noted that purchasing activity in the Toronto housing market has not significantly increased, as many buyers are awaiting further reductions in interest rates.

TRREB President Jennifer Pearce noted, "As mortgage rates continue to trend lower this year and next, we should expect an increase in first-time homebuying activity, particularly in the condominium market."

On a year-over-year basis, sales in August declined by 5.3%, although new listings saw a 1.5% increase compared to the same time last year.