Toronto real estate market is slowing, with home sales and prices up from July last year but down from June

The Toronto Regional Real Estate Board (TRREB) reports that July home sales, supply (new listings) and prices are up year-over-year, but activity appears to be slowing down due to higher interest rates.

TRREB reported on Thursday that market sales reached 5,250 last month, up 7.8% from July 2022.

Paul Baron, president of TRREB’s board of directors, saw the rise as a sign that households have adjusted to higher borrowing costs after the Bank of Canada restarted its rate hike cycle as inflation proved too stubborn.

“With that said, it looks like the selling momentum we saw earlier in the spring has slowed somewhat as the Bank of Canada resumed its rate-tightening cycle in June,” he notes in a press release.

His observation was confirmed by monthly sales data, with July marking the second straight month of declining sales. July sales are down nearly 30% from 7,464 in June and nearly 42% from 8,987 in May.

This paints a picture of a market that started to recover despite a quick string of interest rate hikes last year, but has since been spooked by further increases and high inflation.

These conditions have caused many buyers to slow down again, waiting for further price cuts or more favorable interest and mortgage rates, while sellers are holding back from listing properties because the bidding wars seen at the start of the COVID-19 pandemic have subsided and consumer sentiment has changed dramatically.

Many real estate agents in Toronto note that the market is seasonally down during the summer months, but it started a little earlier this year and it is believed this was likely the result of recent rate hike announcements.

The average selling price rose 4.2% in July year-over-year to $1,118,374, while the base price rose 1.3%.

The average detached home price on the market rose 4.8% year on year to over $1.4 million, while semi-detached homes rose 2.8% to $1.1 million.

During the same period, townhouses rose nearly six percent to $956,000, while the condominium and apartment segment of the market rose about two percent to $735,000.

Overall, however, seasonally adjusted prices have declined slightly since June, with the average price down 0.7%.