Home sales, new listings and prices in the Greater Toronto Area (GTA) improved compared to last July, however, as we move into peak Canadian holiday season, activity has begun to slow indicating the summer stall is here.
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Strong Year-over-Year Market Improvements May Indicate that Canadians have Adjusted to Higher Borrowing Costs
In July, 5,250 homes traded hands. This marks a 7.8% improvement compared to July 2022, but a 29.82% decline from the 7,481 home sales in June 2023. We often see activity begin to slow this time of year in the 416 and 905 alike as Canadians may choose to pause their real estate plans to soak up the summer sun.
- Read: Soaring Canadian Home Sales: The Cities Where the Number of Sales Have More Than Tripled this Year
The sharp improvement in year-over-year sales may indicate that Canadians have accepted the reality of higher borrowing costs. “Home sales continued to be above last year’s levels in July, which suggests that many households have adjusted to higher borrowing costs. With that being said, it does appear that the sales momentum that we experienced earlier in the spring has stalled somewhat since the Bank of Canada restarted its rate tightening cycle in June. Compounding the impact of higher rates has been the persistent lack of listings for people to purchase compared to previous years,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.
Shrinking Number of New Listings Leads to Shrinking Buyer Interest
The time of year combined with the most recent interest rate announcement and dwindling inventory have all contributed to slow overall market activity. Year-over-year, the number of new listings increased by 11.5%. In July 2023, 13,712 properties were listed in the Toronto region, however, this marks a significant decrease of 13.57% from June, when 15,865 homes hit the market.
It’s important to note that while market activity has decelerated, it hasn’t stopped. Stand-out properties are still moving, and quickly, as long as the price is right. The end of August and early September is when we historically begin to see real estate interest significantly increase just in time for the fall market.
Good News for Buyers: Sellers are Responding to Increasing Borrowing Costs by Lowering Prices
In Toronto, home prices decreased across all property types, signaling that sellers are being more flexible as interest rates rise. The most significant price decline in the city was for the most expensive property types: detached and semi-detached homes. The average price of a detached home decreased by 8.07% month-over-month to $1,641,045, while the average price of a semi-detached home dropped 10.75% to $1,257,086.
In the GTA, the average price of each property type decreased except for condo apartments, which experienced a month-over-month increase of 3.42%, to an average price of $697,393.
It’s important for prospective buyers that are active in the market to speak to their real estate agent and understand how all property types are performing in their market. There may be pockets of affordability to be found.
Although the summer stall is upon us, appetite is still strong for stand-out properties that are priced right. Give us a call today to speak to a real estate agent in your area to learn more about the ever-changing market conditions. We’re here to help!
