April home sales fall as Toronto buyers hold out for rate cuts
April 2024 TRREB update
Penelope Graham, Director of Content
Those on the hunt for a home in the Greater Toronto Area enjoyed better-than-usual choice in April, as a surge of new listings hit the market. Sales, however, continued to trend lower as would-be buyers appear to be waiting for interest rate cuts before they’ll make a move.
The latest data from the Toronto Regional Real Estate Board (TRREB) reveals a total of 7,114 homes sold over the course of the month, which was down -5% compared to April 2023. This is due to the “temporary resurgence in market activity” that was seen in the market this time last year, says the board. On a seasonally adjusted monthly basis, sales also edged lower from March.
The number of new listings rose by a whopping 47.2% year over year, with 16,941 properties brought to market.
Average GTA home price remains flat
The combination of scant demand and increased supply did little to heat prices, with the region’s average up just 0.3% annually to $1,156,167. Meanwhile the MLS HPI Composite Index – a measure of the most typical type of home sold, with the upper and lower extremes removed – rose by 0.4%. Compared to March, the average home price rose 1.5%.
The wave of new supply is due to optimistic sellers who expect demand will pick up once the Bank of Canada cuts interest rates, says TRREB President Jennifer Pearce.
“Listings were up markedly in April in comparison to last year and last month. Many homeowners are anticipating an increase in demand for ownership housing as we move through the spring,” she stated in TRREB’s release. “While sales are expected to pick up, many would-be home buyers are likely waiting for the Bank of Canada to actually begin cutting its policy rate before purchasing a home.”
Future rate cuts to spur demand
It’s largely anticipated by economists and markets that the central bank will make its first interest rate cut in its next announcement on June 5th, or in July by the latest. Once borrowing conditions start to ease, however, it will likely put the boil back under price growth points out Jason Mercer, TRREB’s Chief Market Analyst.
“Generally speaking, buyers are benefitting from ample choice in the GTA resale market in April,” he stated. “As a result, there was little movement in selling prices compared to last year. Looking forward, the expectation is that lower borrowing costs will prompt tighter market conditions in the months to come, which will result in renewed price growth, especially as we move into 2025.”
Detached houses in highest demand
Currently, detached single-family houses saw the biggest price increase, up 1.8% year over year to an average of $1,516,070, though sales dipped by -7.5%, with 3,175 sold throughout the GTA (the most volume of any home type). Semi-detached houses could be bought for an average of $1,139,929 in May, marking a slight 0.3% increase, following 620 sales (-1%).
Condo unit sales, meanwhile, dipped by 6.5% with 2,013 units trading hands, at an average price of $728,067 (0.6%). Townhouses were the only home type to see an annual increase in sales with 1,229 transactions, up 0.7%. The average-priced unit came to $949,839 (-3.7%).
Source: Toronto Regional Real Estate Board
Prices rose most in City of Toronto
Sales activity dipped by similar levels in both the City of Toronto as well as the surrounding “905”-area housing markets. A total of 2,581 homes sold within the 416, down -5%, while 4,533 traded hands outside city limits, a decrease -4.9%.
Prices held firmer within Toronto, however, rising 3% year over year to an average of $1,152,200, while they slipped -1.1% in the 905, to $1,158,425. New listings rose by a considerable amount across the region, rising 51% in Toronto, and 44.7% in the 905.
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Penelope Graham, Director of Content
Penelope has over a decade of experience covering real estate, mortgage, and personal finance topics and her commentary on the housing market is featured on both national and local media outlets.