Toronto home sales jump up but courageous buyers take their time, report says
Toronto home sales rose 4.2 per cent in June after four straight months of declines, but activity was relatively slow as new home listings surged and would-be buyers became emboldened with the growing abundance of options.
There were 5,406 sales last month after removing seasonal influences, according to the Toronto Regional Real Estate Board’s monthly report. Although that was higher than May, sales were still 12.6 per cent lower than June of last year.
More buyers had been expected to enter the market after the early June interest-rate cut. But as more homeowners continue to put their properties up for sale, prospective buyers have faced less and less competition.
“Buyers are feeling that there’s choice and there’s no rush,” said Josie Stern, a realtor with Sutton Group-Associates Realty Inc., who has sold homes in Toronto for 35 years. She said with the increase in inventory, buyers “feel emboldened. They don’t feel like they have to buy right now.”
The number of new listings rose 9.3 per cent from May to June on a seasonally adjusted basis, according to real estate board or TRREB. That was the steepest increase since September of last year, when sales started to slow after the Bank of Canada’s surprise summer interest-rate hikes.
At the end of last month, there were 23,613 active listings – the highest volume since 2010.
The central bank’s next rate announcement is at the end of July. But even if the bank cuts again, realtors are not sure that will motivate buyers given the amount of inventory available.
“The June sales result suggests that most homebuyers will require multiple rate cuts before they move off the sidelines,” TRREB president Jennifer Pearce said in the report.
A board-sponsored poll found that there would need to be cumulative rate cuts of at least 100 basis points to boost home sales significantly, TRREB’s report said.
The cost of borrowing is still relatively high with the interest rate on the typical five-year fixed mortgage still above 5 per cent. And it remains difficult for prospective homebuyers to qualify for a large enough mortgage to buy in the Toronto region, one of the country’s most expensive real estate markets.
The home price index, which excludes the priciest properties, was $1,092,100 last month. That was 0.4-per-cent higher than May and 4.8-per-cent lower than June of last year. Homes prices lost the most value in the regions to the west of the city of Toronto. Year over year, the home price index in Halton and Peel were down by 5 per cent and 6 per cent, respectively.
This article was first reported by The Globe and Mail
