Warning arrives as sales activity remains largely flat in August
The president of Toronto’s real estate board has suggested turbulence is likely to continue in the city’s housing market in the coming months amid ongoing uncertainty over interest rates.
That’s despite home sales remaining largely flat between July and August, according to the latest market data released by the Toronto Regional Real Estate Board (TRREB) this morning.
“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,” board chief Paul Baron said in remarks accompanying the release.
Still, “solid demand” for both ownership and rental housing will continue, Baron added, with record immigration levels set to ensure robust activity in both the Greater Toronto Area (GTA) and broader Greater Golden Horseshoe.
OUT NOW! Higher borrowing costs continue to impact housing market in August. Access TRREB’s latest #MarketWatch Report for the latest #marketstats & MORE! ➡️🔗https://t.co/0J4mra64bm#RealEstateNews #CDNRealEstate #GTArealestate #TorontoRealEstate #RealEstate pic.twitter.com/bFeAEkCcJu
— Toronto Regional Real Estate Board (@TheReal_TRREB) September 6, 2023
Uneven market performance continues
August saw 5,294 transactions in Toronto’s housing market, a jump of less than 1% over the prior month but down 5.2% on a year-over-year basis.
Average home prices fell by 3% compared with July, coming in at just over $1.082 million, and were marginally higher (0.3%) than the same time last year.
Sales of detached homes were down by double digits on a yearly basis, falling by 12%, with a spike in condo sales (7.6%) accompanied by a big year-over-year drop in sales of semi-detached properties, by 14.4%.
On average, a detached home in Toronto cost $1.4 million in August, 3% higher than the same month last year, and the cost of semi-detached properties increased by almost 7%, to slightly north of $1 million.
The resumption of rate hikes by the Bank of Canada has played a significant role in the unpredictable trajectory of market conditions, according to TRREB chief market analyst Jason Mercer, impacting buyers and sellers alike.
“As interest rates continued to increase in May, after a pause in the winter and early spring, may buyers have had to adjust their offers in order to qualify for higher monthly payments,” he said. “Not all sellers have chosen to take lower than expected selling prices, resulting in fewer sales.”
