Economic uncertainty, high interest rates, and summer holidays resulted in an expected decline in home sales and prices in August for the Greater Toronto Region (GTA). According to the Toronto Regional Real Estate Board, overall home sales were 6% lower than last August with 5,294 homes trading hands. This marks a 1% increase from July, indicating buyer interest is still maintained.
Enjoying our content? Subscribe to our free weekly newsletter to get real estate market insights, news, and reports straight to your inbox.
“More balanced market conditions this summer compared to the tighter spring market resulted in selling prices hovering at last year’s levels and dipping slightly compared to July. As interest rates continued to increase in May, after a pause in the winter and early spring, many buyers have had to adjust their offers in order to qualify for higher monthly payments. Not all sellers have chosen to take lower than expected selling prices, resulting in fewer sales,” said TRREB Chief Market Analyst Jason Mercer.
Demand Grows for Condos As Affordability Tightens
While detached and semi-detached home sales experienced a year-over-year drop, by 13% and 15% respectively, condo apartment sales experienced both yearly and monthly growth. Condo apartment sales increased by 7.6% year-over-year and 6.9% month-over-month. Peel Region, Halton Region and the City of Toronto experienced substantial month-over-month increases in condo sales at 17.7%, 12.9% and 7.2% respectively. This indicates that as market affordability remains tight, motivated buyers are favouring comparatively affordable property types.
At the same time, condo apartments were the only property type to experience both a year-over-year and month-over-month decline in average price, possibly increasing its attractability to homebuyers. In contrast to condos, detached, semi-detached and townhouse properties experienced modest year-over-year price growth at 2.8%, 6.9%, and 3.9% respectively, however, all saw month-over-month declines.
The average home price for the region also dropped by 3.2% from July to $1,082,496 – marking the third consecutive month of average home price declines.
Rate Hike Pause May Bring Increased Activity
With the Bank of Canada announcing a pause in interest rate hikes today, homebuyers may now return more confidently in the fall.
“Looking forward, we know there will be solid demand for housing – both ownership and rental – in the Greater Toronto Area and broader Greater Golden Horseshoe. Record immigration levels alone will assure this. In the short term, we will likely continue to see some volatility in terms of sales and home prices, as buyers and sellers wait for more certainty on the direction of borrowing costs and the overall economy,” said TRREB Presiden Paul Baron.
Dwindling supply has long been an issue for the GTA, but the summer stall in housing market activity is allowing inventory to slowly build up, which will in turn give buyers more options in the fall. Active listings in the GTA increased month-over-month by 0.8% to 15,371, a small but promising increase after active listings hovered around 10,000 for most of the spring. Months of inventory also increased, from 2.1 in July to 2.2 in August, indicating conditions for the fall market will be more balanced.
With the fall market just around the corner, now is the time to start preparing. Give us a call today to speak to a real estate agent in your area to learn more about the conditions in your local area. We’re here to help!
