The Toronto Regional Real Estate Board says home sales in August fell from last year as average home prices edged lower.
The board said there were 4,975 homes sold in August in the Greater Toronto Area, a 5.3 per cent drop compared with the 5,251 homes sold in the same month a year earlier. Sales were up 0.6 per cent from July on a seasonally adjusted basis.
The average selling price was down 0.8 per cent compared with August 2023 at $1,074,425. The composite benchmark price, which aims to represent typical homes, was down 4.6 per cent year-over-year.
New listings in August totalled 12,547, up 1.5 per cent from last year.
TRREB president Jennifer Pearce said mortgage rates should continue to trend lower this year and next, prompting an uptick in first-time buying activity, including in the condo market.
On Wednesday, the Bank of Canada announced a third consecutive interest rate cut by a quarter-percentage point. Governor Tiff Macklem said the central bank's decision to bring its key lending rate down to 4.25 per cent was motivated by continued progress on inflation and the need for economic growth to pick up again.
“The Bank of Canada’s rate cut announced on Sept. 4 will lead to a further improvement in affordability, especially for those using variable-rate mortgages," said Pearce in a statement, adding that first-time buyers are "especially sensitive" to changes in borrowing costs.
Debbie Cosic, founder and CEO of In2ition Realty, said current conditions are "almost debilitating" for first-time buyers who are trying to qualify for a mortgage.
She said while lower interest rates will help, more needs to be done to alleviate the burden.
"What we're hearing on the sales floor is 'Interest rates are too high, I'm not qualifying for mortgages, the deposits are too high,'" said Cosic.
In the City of Toronto, there were 1,718 sales last month, an 8.6 per cent decrease from August 2023. Throughout the rest of the GTA, home sales fell 3.4 per cent to 3,257.
All property types saw fewer sales in August compared with a year ago throughout the GTA. Condos led the drop with 11.4 per cent fewer sales, followed by townhouses at 6.1 per cent and semi-detached homes at 3.4 per cent.
There were one per cent fewer detached homes that changed hands year-over-year.
Meanwhile, a new report by digital real estate platform Wahi says 70 per cent of homes purchased across the GTA in August sold for less than listed.
It said the remaining 27 per cent of homes sold above asking and three per cent sold for the seller’s asking price.
In August 2023, 60 per cent of homes sold below the asking price, the report said.
Cosic said her advice to potential buyers is to "jump in now and purchase," while the market is still cool.
"Prices ultimately will go up when the market returns," she said.
"We know that interest rates are headed downward, so you bite the bullet now on the slightly higher interest rates ... and then you'll refinance in a year or two."
This report by The Canadian Press was first published Sept. 5, 2024.