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GTA home sales down 21 per cent year-over-year in May as buyers wait for relief

The housing market remained slow in the Greater Toronto Area (GTA) this spring, with home sales falling for the fourth consecutive month and declining 21.7 per cent year-over-year to 7,013.

The market report from the Toronto Regional Real Estate Board (TRREB) also found that the average selling price was down 2.5 per cent to $1,165,691 from May 2023. New listings were also up considerably, increasing 21.1 per cent to 18,612 year-over-year.

The year-over-year changes are partly due to the city’s short-lived uptick in market activity after the Bank of Canada held the interest rate for the second consecutive month in April at 4.75 per cent, prompting a rush of activity from buyers were waiting on the sidelines until the rate was hiked again in June. 

Home buyers this spring have been waiting for relief when it comes to mortgage rate, the report noted. “Existing homeowners are anticipating an uptick in demand, as evidenced by a year-over-year increase in new listings. With more choice compared to a year ago, buyers benefitted from more negotiating room on prices.”

Selling prices in May adjusted slightly lower to mitigate the impact of higher mortgage rates. “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,” said TRREB chief market analyst Jason Mercer.

That upward pressure is likely here — the Bank of Canada announced its first rate cut in four years on Wednesday, dropping the overnight rate to 4.75 per cent with more to come.

As borrowing costs decrease over the next 18 months, more buyers are expected to enter the market, including many first-time buyers. This will open up much needed space in a relatively tight rental market,” said TRREB president Jennifer Pearce.

In May, the bulk of home sales occurred in the detached market, especially in the 905 — there were 3,238 sales, compared to just 616 semi-detached sales, 1,149 townhouse sales and 1,942 condo sales. Just 851 of those detached home sales were in city of Toronto, while 2,387 were in the 905.

Townhouses and condos led the year-over-year drop in sales, with 24.3 per cent and 24.1 per cent, respectively, followed by a 21.3 per cent decline in semi-detached sales and 19.4 per cent drop in detached sales.

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