Toronto home sales rise in August after a drop in July, prices fall
5:03 am Thursday, September 05th, 2024
OTTAWA (Reuters) – Greater Toronto-area home sales rose in August on a month-to-month basis, data showed on Thursday, rebounding from a drop in July.
Seasonally adjusted sales increased 0.6% in August following a drop of 0.8% in July, according to Toronto Regional Real Estate Board (TRREB) data.
The August rise was only the third monthly increase in the last eight months, TRREB data showed.
Average prices for homes were down 0.8% last month to C$1.12 million ($815,178), ending a six-month rising streak, while new listings fell 1.6%, TRREB said in a release.
Housing economists and real estate agents have predicted that home prices would gradually start to fall as new listings rise as some homeowners, burdened with high interest rates, seek an exit to avoid defaulting on mortgages.
The trend usually unfolds first in Toronto, Canada’s largest city. Toronto accounts for two-thirds of Canada’s condominium sales and is considered a bellwether for other big metropolitan areas.
The central bank cut its key policy interest rate by 25 basis points for the third time in a row on Wednesday, shrinking it to 4.25%.
Money markets are pricing in an almost 100% chance of another 25-basis-point cut in October, followed by a cut in December, which could potentially bring interest rates to 3.75% by year-end.
Despite the central bank’s rate cuts, buying activity in Toronto’s housing market has not flared up as people continue to wait for rates to drop further, TRREB said.
“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,” TRREB President Jennifer Pearce said.
On a year-over-year basis, sales were down 5.3% last month, TRREB said, adding that new listings were up 1.5% on an annual basis.
(Reporting by Promit Mukherjee; Editing by Leslie Adler)
