Toronto's real estate market showed signs of recovery in June, with home sales rising 4.2% after four months of decline. This follows Canada's first interest rate cut in over four years. Average home prices increased marginally to CAD 1.13 million, while new listings jumped 9.3%. Despite these improvements, year-over-year figures still show decreases in sales and prices. The Bank of Canada's rate cut to 4.75% likely influenced this shift, with markets anticipating further easing. TRREB's chief analyst describes the market as well-supplied, benefiting recent buyers with more choice and negotiating power. The combination of lower borrowing costs and high inventory is expected to balance the market moving forward.
Toronto's real estate market showed signs of revival in June, breaking a four-month decline in home sales following Canada's first interest rate cut in over four years. According to data from the Toronto Regional Real Estate Board (TRREB), seasonally adjusted sales increased by 4.2% from May to June. Average home prices also saw a modest rise of 1.8%, reaching CAD 1.13 million (USD 830,000), the highest since December. New listings experienced a significant boost, increasing by 9.3%.
The Bank of Canada's decision to lower rates by 0.25% to 4.75% in early June, citing a reduced need for restrictive monetary policy, likely influenced this market shift. Financial markets are anticipating further easing, with a 45% chance of another rate cut this month and expectations of a 4.25% policy rate by year-end. While TRREB did not provide a specific explanation for the June sales increase, they have previously noted that monthly figures can be volatile when the market is nearing a transition point.
Despite the month-over-month improvements, year-over-year comparisons still show a 16.4% decrease in home sales and a 1.6% drop in average selling prices. However, new listings surged 12.3% compared to the previous year. Jason Mercer, TRREB's chief market analyst, described the Toronto area housing market as "well-supplied," noting that recent buyers have benefited from increased choice and negotiating power on prices. Looking ahead, Mercer anticipates that as sales pick up alongside lower borrowing costs, the elevated inventory levels will help prevent a rapid increase in selling prices.
This suggests a potential turning point in Toronto's real estate market, with the combination of lower interest rates and increased inventory creating a more balanced environment for both buyers and sellers. However, it remains to be seen whether this trend will continue or if the market will experience further fluctuations in the coming months.
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