TORONTO — The Toronto Regional Real Estate Board says home sales in June declined 16.4 per cent from last year, with many potential buyers staying on the sidelines despite the highly anticipated Bank of Canada interest rate cut.
The board said 6,213 homes changed hands in the month compared with 7,429 in June of last year.
The average selling price in the Greater Toronto Area was down 1.6 per cent year-over-year to $1,162,167.
TRREB president Jennifer Pearce said the central bank's 25-basis-point cut last month provided some initial relief for the housing market, but the June sales data "suggests that most homebuyers will require multiple rate cuts before they move off the sidelines."
The Bank of Canada began its rate-lowering process with a June 5 cut that brought its key interest rate down to 4.75 per cent from five per cent.
Ipsos polling for TRREB indicates that cumulative rate cuts of at least 100 basis points, or a full percentage point, would be required to boost home sales by a meaningful amount.
"It's got to be a lot more than 25 basis points," said Vy Ngo, a sales representative with Big City Realty Inc. Brokerage.
Ngo said despite the lack of a significant uptick in buyer demand after the rate cut announcement, it did prompt an influx of supply around the GTA. She said sellers were more optimistic than buyers that the decision would spur a rebound in activity after there was essentially "no spring market" this year.
"I guess all the sellers have been holding off for some time now. Everyone probably had the same idea, like 'let's wait till the rate cut,'" she said.
"So literally, as soon as that happened, there was this huge amount of new listings that came to the market."
There were 23,613 active listings on the market last month, up 67.4 per cent from June 2023. New listings rose 12.3 per cent over the same period, with 17,964 properties put on the market last month.
“The GTA housing market is currently well-supplied. Recent homebuyers have benefited from substantial choice and therefore negotiating power on price," said TRREB chief market analyst Jason Mercer in a news release.
"Moving forward, as sales pick up alongside lower borrowing costs, elevated inventory levels will help mitigate against a quick run-up in selling prices."
The City of Toronto saw 2,236 sales in June, a 20.6 per cent decrease from a year ago. Throughout the rest of the GTA, home sales fell 13.8 per cent to 3,977.
All property types saw fewer sales in June compared with a year ago throughout the entire region, led by a 28.1 per cent decline in condo sales.
Sales of townhouses and semi-detached homes fell 14.1 and 11.4 per cent, respectively, along with 10.6 per cent fewer detached properties that changed hands year-over-year.
Ngo said there are advantages to being a buyer amid the current conditions. The surge in supply coupled with less competition than usual for this time of year means those actively searching for their new home could hold negotiating power.
"It's really hard to time the market," she said
"I have some that are holding to see where things go, but I do notice more people thinking about this than a couple of months ago."
This report by The Canadian Press was first published July 4, 2024.
Sammy Hudes, The Canadian Press
