OTTAWA (Reuters) – Greater Toronto area home sales dropped in July on a month-to-month basis, data showed on Tuesday, after a surprise rise in June broke a fourth-month streak of drop in home deals.
Seasonally adjusted sales declined 1.7% in July from a rise of 3.2% observed in June, according to Toronto Regional Real Estate Board (TRREB) data.
Average prices for homes were marginally up 0.2% last month to C$1.13 million ($815,178.18), the highest since December, while new listings were down 0.8%, TRREB said in a release.
Home prices have been rising since the beginning of the year in one of the country’s busiest real estate markets as demand slowly seeps back into the market on anticipation of further rate cuts from the Bank of Canada.
The central bank has cut its key policy rate twice in as many months, bringing interest rates down to 4.5% from more than a two decade high of 5%.
Last month, after the rate cut decision, Bank of Canada Governor Tiff Macklem said that if inflation continues to ease, further rate cuts could be possible.
Financial markets are fully pricing in another 25 basis point reduction in borrowing cost in September and expect an over 25% chance of a bulkier 50 basis point cut.
This could potentially bring a lot of people waiting at the fences to jump into the housing market to buy homes, TRREB said.
“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,” TRREB President Jennifer Pearce said.
On a year-over-year basis, sales were up 3.28% last month, TRREB said, adding that new listings were up 18.47% on an annual basis.
Listings have been growing in Toronto as many homeowners facing a sharp rise in mortgage payments when their tenure comes up for renewal next year, are looking to exit their investment.
Toronto accounts for two-thirds of the country’s condominiums sales and is considered a bellwether for other big metropolitan areas.
($1 = 1.3862 Canadian dollars)
(Reporting by Promit Mukherjee; Editing by Sandra Maler)
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