Toronto’s home sales drop in March

By Nada Ali On Apr 3, 2024

Home sales in the Greater Toronto area fell for the second consecutive month in March, while prices continued to rise, tempering the housing market recovery amid historically high borrowing costs, Reuters reported on Wednesday.

According to data from the Toronto Regional Real Estate Board, seasonally adjusted sales dropped by 1.1 per cent in March following an 11.5 per cent decrease in February.

The average home price increased by 0.7 per cent to C$1.09 million ($803,420) last month, the highest since December, while new listings decreased by three per cent.

The strong increase in home sales in December and January suggested a market revival in anticipation of potential interest rate cuts by the Bank of Canada.

Year-over-year sales were down by 4.5 per cent in March, partly attributed to Good Friday falling in March this year compared to April in 2023.

However, sales in the first quarter saw an annual increase of 11.2 per cent, with new listings rising by 18.3 per cent.

TRREB President Jennifer Pearce noted a gradual improvement in market conditions over the past quarter, with more buyers adjusting to the higher interest rate environment.

“We have seen a gradual improvement in market conditions over the past quarter. More buyers have adjusted to the higher interest rate environment. At the same time, homeowners may be anticipating an improvement in market conditions in the spring, which helps explain the marked increase in new listings so far this year. Assuming we benefit from lower borrowing costs in the near future, sales will increase further, new listings will be absorbed, and tighter market conditions will push selling prices higher,” noted Pearce.

Investors are speculating that the Bank of Canada will maintain its benchmark interest rate at five per cent next week but may initiate a rate-cutting cycle in June or July.

Pearce also mentioned that homeowners may be anticipating better market conditions in the spring, explaining the significant increase in new listings so far this year.