The number of existing houses and apartments listed for sale climbed again in Canada's largest metropolitan region, an the expanded supply that's expected to keep prices down even as buyers step back into the market.
The Toronto Regional Real Estate Board said new listings in the Toronto area in July rose to 16,296, an 18.5% increase from a year earlier. Home sales also edged higher, to 5,391 in July, a 3.3% increase from a year ago, according to TRREB.
The two recent interest cuts by the Bank of Canada may have generated increased activity in the market, board executives said.
"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 rate cuts announced in June and July, board President Jennifer Pearce said in a commentary. "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."
The average sale price for all residential property types in the Toronto region was $1,106,617 last month, a 0.9% decrease from July 2023. The average sale price in June was $1,181,002.
"As more buyers take advantage of more affordable mortgage payments in the months ahead, they will benefit from the substantial build-up in inventory," said Jason Mercer, chief market analyst of TRREB, in a commentary. "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."
The jump in new listings was also seen in Vancouver, Canada's most expensive city for housing. The Greater Vancouver Realtors said 5,597 new residential properties were listed for sale last month, up almost 20% from a year ago.
Residential sales in the Vancouver region totaled 2,333 in July, a 5% decrease from the 2,455 sales recorded in July 2023. Sales were also 17.6% below the 10-year seasonal average.
"The trend of buyers remaining hesitant, which began a few months ago, continued in the July data despite a fresh quarter percentage point cut to the Bank of Canada's policy rate," said Andrew Lis, the board's director of economics and data analytics in a commentary. "With the recent half percentage point decline in the policy rate over the past few months, and with so much inventory to choose from, it's a bit surprising transaction levels remain below historical norms as we enter the mid-point of summer."
In Montreal, Canada's second-largest city, there were 3,439 home sales in July, a 12% increase from a year ago, according to the Quebec Professional Association of Real Estate Brokers. New listings also climbed by 14% during the period, the group said.