Market Insight for August 9

Greater Toronto Area (GTA) home sales in July 2024 were up compared to July 2023. While sales were up from last year, buyers continued to benefit from more choice in the GTA marketplace, with annual growth in new listings outstripping that of sales. The better-supplied market meant that buyers also benefited from a slight relief in selling prices on average.

“It was encouraging to see an uptick in July sales relative to last year. We may be starting to see a positive impact from the two Bank of Canada rate cuts announced in June and July. Additionally, the cost of borrowing is anticipated to decline further in the coming months. Expect sales to accelerate as buyers benefit from lower monthly mortgage payments,” said TRREB President Jennifer Pearce. GTA REALTORS® reported 5,391 home sales through TRREB’s MLS® System in July 2024 – a 3.3 per cent increase compared to 5,220 sales reported in July 2023. New listings entered into the MLS® System amounted to 16,296 – up by 18.5 per cent year-over-year. On a seasonally adjusted basis, July sales and new listings edged lower compared to June.

The average selling price of $1,106,617 was down by 0.9 per cent over the July 2023 result of $1,116,950. On a seasonally adjusted monthly basis, both the MLS® HPI Composite and the average selling price were up slightly compared to June 2024.

“As more buyers take advantage of more affordable mortgage payments in the months ahead, they will benefit from the substantial build-up in inventory. This will initially keep home prices relatively flat. However, as inventory is absorbed, market conditions will tighten in the absence of a large-scale increase in home completions, ultimately leading to a resumption of price growth,” said TRREB Chief Market Analyst Jason Mercer.

On the other, investors aren’t seeing the easy money they once did. Much of the inventory being sold is from investors looking to lighten their position. At the same time, new condo investors are finding out the returns are nowhere close to what was expected, while rental vacancies surge higher. The narrative and data are at odds with each other, and it won’t be clear for another few months which is correct.