Although June kicked off with a Bank of Canada interest rate cut, Greater Toronto Area (GTA) home sales failed to pick up in the way that some experts had forecasted they would. According to new figures from the Toronto Regional Real Estate Board (TRREB), there were just 6,213 home sales through the MLS® System in June 2024, a figure that is 16.4% below the June 2023 level of 7,429 sales.
TRREB’s data shows that most of June’s transactions were concentrated in the detached home segment, with 2,988 sales recorded, while there were 1,054 townhouse sales, 1,520 condo apartment sales, and just 599 sales of semi-detached homes.
Speaking to the overall sales figure, TRREB said on Thursday that “many buyers kept their home purchase decisions on hold.”
“The Bank of Canada’s rate cut last month provided some initial relief for homeowners and home buyers. However, the June sales result suggests that most home buyers will require multiple rate cuts before they move off the sidelines,” said TRREB President Jennifer Pearce.
When the next cuts are coming remains to be seen. Statistics Canada’s latest Consumer Price Index reading showed a 2.9% year-over-year gain in May, up from 2.7% in April, which had some economists faltering on their previously-held belief that the central bank will cut the policy rate again this month. At this point, many experts are banking on the next cut coming in September.
According to Pearce, recent Ipsos polling for TRREB has suggested that “cumulative rate cuts of 100 basis points or more are required to boost home sales by any significant amount.”
On the inventory side of things, the GTA’s market was “well-supplied” last month, with 17,964 new listings recorded in the MLS® System, representing a 12.3% year-over-year rise.
Meanwhile, the MLS® Home Price Index Composite benchmark slipped 4.6% in the month, compared to the prior June, while the average selling price — at $1,162,167 — ended the month 1.6% below it’s year-ago level of $1,181,002. That said, both the MLS® HPI Composite and the average selling price managed month-over-month rises when adjusted for seasonal effects.
“Recent home buyers have benefitted from substantial choice and therefore negotiating power on price,” noted TRREB Chief Market Analyst Jason Mercer. “Moving forward, as sales pick up alongside lower borrowing costs, elevated inventory levels will help mitigate against a quick run-up in selling prices.”
