September Sees Slight Increase In GTA Home Sales

A true market rebound is likely still a ways off, but signs of life were detected in the GTA housing market this September, according to the Toronto Regional Real Estate Board's (TRREB's) latest Market Watch report.

In the latest incline on the relatively flush rollercoaster of GTA home sales recorded over the last few months, sales reached 4,996 in September, inching up from 4,975 in August, but down from July's 5,391 sales. Though a month-over-month increase of 21 transactions is unremarkable, if you zoom out, September's sales represent an 8.5% increase from September 2023.

According to TRREB, the uptick occurred as "Buyers were starting to take advantage of more affordable market conditions brought about by interest rate cuts and lower home prices." And sales are only going to increase with further cuts and policy changes, TRREB President Jennfier Pearce says.

“As buyers take advantage of changes to mortgage lending guidelines and borrowing costs trend lower, home sales will steadily increase in relation to population growth," she says. "With every rate cut, a growing number of GTA households will afford a long-term investment in home ownership, including first-time buyers."

Of the sales recorded, 2,354 were detached homes, up 10.5% year over year, 446 were semi-detached, up 12.6%, and 682 were townhomes, up 14.3%. The only residence type to that remained flat in sales were condos, which saw 1,312 sales, just a 0.8% increase.

Further favouring buyers, new listings totalled 18,089 in September, up by 10.5% year over year. “The annual improvement in September home sales was more than matched by the increase in new listings over the same period," says TRREB's Chief Market Analyst Jason Mercer. "This resulted in a better-supplied market and increased negotiating power for buyers re-entering the market. The ability to negotiate on price, led to moderate year-over-year price declines, particularly in the more affordable condo apartment and townhouse segments, which are popular with first-time buyers."

On that note, the MLS® Home Price Index Composite benchmark dipped by 4.6% compared to last September, with the average selling price sitting at $1,107,291, down by only 1% compared to September 2023's average of $1,118,215. In August the price sat at $1,074,425, which on a seasonally-adjusted basis, actually represents a slight month-over-month increase for September.

Looking forward, TRREB CEO John DiMichele praises the feds for introducing the reforms to mortgage lending guidelines saying, "Longer amortization periods and the ability to insure mortgages for purchases over $1 million dollars will give home buyers more options as the GTA housing market recovers."

However, the reforms have drawn criticism from experts who are weary, particularly of the 30-year amortization allowance. As Ross McCredie, CEO of Sutton Group, told STOREYS last month, "If you were my best friend and you asked me if you should [enter into a 30-year mortgage], I would suggest you not do it, because a lot of the time, the basic math is not in your favour."