Toronto home sales were down 7.1 per cent year-over-year in September, hitting an eight-month low of 4,642 sales according to a new report by the Toronto Regional Real Estate Board (TRREB). The dip in sales was especially noticeable for semi-detached houses and townhouses.

The city did experience a slight increase in the average selling price — the average price is now at $1,119,428, a 3 per cent increase year-over-year.

But with new listings flooding the market and home sales on a steep decline — sales were also down 12 per cent from the previous month — Toronto could be entering into a market that is favourable for buyers.

New listings surged to 16,528 in the GTA, an upward trend month-over-month and year-over-year, marking a sales to new listings ratio (SNLR) of 28.6 per cent. A ratio any lower than 40 per cent usually indicates a buyer’s market, while ratios higher than 60 per cent indicate a seller’s market.

The SNLR was up at 66 per cent in April of this year, but has been on the decline over the spring and summer, reaching 43 per cent in August.

“We did experience [a] more balanced market in the summer and early fall, with listings increasing noticeably relative to sales. This suggests that some buyers may benefit from more negotiating power, at least in the short term. This could help offset the impact of high borrowing costs,” said TRREB chief market analyst Jason Mercer.

The future of the Toronto market depends on interest rates, according to TRREB president Paul Baron. “In the short term, the consensus view is that borrowing costs will remain elevated until mid-2024, after which they will start to trend lower,” he said. “This suggests that we should start to see a marked uptick in demand for ownership housing in the second half of next year, as lower rates and record population growth spur an increase in buyers.”