Toronto-area home sales decline in August, but rate cut could spur activity: board

The Toronto Regional Real Estate Board says home sales in August fell from last year as average home prices edged lower.

The board said 4,975 homes were sold in August in the Greater Toronto Area, a 5.3 per cent drop from the 5,251 homes sold in the same month a year earlier. Sales were up 0.6 per cent from July on a seasonally adjusted basis. 

The average selling price was down 0.8 per cent compared with August 2023 at $1,074,425. The composite benchmark price, which aims to represent typical homes, was down 4.6 per cent year-over-year.

New listings in August totalled 12,547, up 1.5 per cent from last year.

TRREB president Jennifer Pearce said mortgage rates should continue to trend lower this year and next, prompting an uptick in first-time buying activity, including in the condo market.

On Wednesday, the Bank of Canada announced a third consecutive interest rate cut by a quarter-percentage point. Governor Tiff Macklem said the central bank’s decision to bring its key lending rate down to 4.25 per cent was motivated by continued progress on inflation and the need for economic growth to pick up again.

“The Bank of Canada’s rate cut announced on Sept. 4 will lead to a further improvement in affordability, especially for those using variable-rate mortgages,” said Pearce in a statement, adding that first-time buyers are “especially sensitive” to changes in borrowing costs.

In the City of Toronto, there were 1,718 sales last month, an 8.6 per cent decrease from August 2023. Throughout the rest of the GTA, home sales fell 3.4 per cent to 3,257.

All property types saw fewer sales in August compared with a year ago throughout the GTA. Condos led the drop with 11.4 per cent fewer sales, followed by townhouses at 6.1 per cent and semi-detached homes at 3.4 per cent.

There were one per cent fewer detached homes that changed hands year-over-year.

“As borrowing costs trend lower over the next year-and-a-half, homebuyers will initially benefit from both lower monthly mortgage payments and lower home prices,” said TRREB chief market analyst Jason Mercer in a press release.

“Even as demand picks up, especially in 2025, it will take time for the inventory of listings to be absorbed. Ample choice in the market will help keep price growth moderate, at least in the initial phases of recovery.”