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Greater Toronto home sales fall in May, but Bank of Canada decision could spur demand

Written by on June 5, 2024

TORONTO — The Toronto Regional Real Estate Board says home sales in May were down 21.7 per cent from last year, but new listings continued to rise as homeowners anticipate a bump in demand.

The board said 7,013 homes changed hands in the month compared with 8,960 in May of last year, which coincided with a brief market resurgence.

The average selling price in the Greater Toronto Area was down 2.5 per cent year-over-year to $1,165,691.

New listings jumped 21.1 per cent over the same period, with 18,612 properties put on the market last month.

TRREB president Jennifer Pearce said would-be homebuyers are waiting for “clear signs” of declining mortgage rates before they get off the sidelines.

“As borrowing costs decrease over the next 18 months, more buyers are expected to enter the market, including many first-time buyers,” she said in a press release.

“This will open up much needed space in a relatively tight rental market.”

The Bank of Canada is set to announce its latest interest rate decision Wednesday morning, which some economists predict could entail a rate cut.

In the City of Toronto, there were 2,701 sales last month, a 17.3 per cent decrease from May 2023. Throughout the rest of the GTA, home sales fell 24.3 per cent to 4,312.

All property types saw fewer sales in May compared with a year ago throughout the GTA. Townhouses and condos led the drop, with 24.3 and 24.1 per cent fewer sales, respectively, followed by semi-detached homes at 21.3 per cent.

There were 19.4 per cent fewer detached properties that changed hands year-over-year.

“We have seen selling prices adjust to mitigate the impact of higher mortgage rates,” said TRREB chief market analyst Jason Mercer in a press release.

“Affordability is expected to improve further as borrowing costs trend lower. However, as demand picks up, we will likely see renewed upward pressure on home prices as competition between buyers increases.”

This report by The Canadian Press was first published June 5, 2024.

Sammy Hudes, The Canadian Press