TORONTO — The Toronto Regional Real Estate Board (TRREB) says August sales were down 34 per cent since last year, but up almost 15 per cent from July, as buyers returned to the market to take advantage of prices that eased from winter’s elevated levels.
The board said Friday that sales for the month amounted to 5,627 compared to 8,549 last August and 4,900 in July 2022.
The 34 per cent year-over-year drop was a lower rate of decline than the previous four months, but BMO Capital Markets senior economist Robert Kavcic saw such figures as "a bit of a mixed picture."
"We’re still bouncing around levels that have only seen worse comparisons at the depth of the COVID shutdown and during the 2009 financial crisis," he wrote in a note to investors.
The data comes at a time when the region’s real estate market has cooled from the heated conditions seen as the year began.
Climbing interest and mortgage rates in recent months have put a damper on sales and started to weigh on prices, ending bidding wars and encouraging prospective buyers to sit on the sidelines and wait for greater price drops.
Terry Parkinson, an agent with Royal LePage Signature Realty in Toronto, found some buyers realized how much the market has cooled already and decided to make a purchase last month.
She heard of a property in Oakville fetching 16 offers, hearkening back to the heated winter market, and some Toronto condos receiving multiple offers, a departure from earlier in the summer.
Those that ventured into the market in recent weeks found the prices were below those seen in the frenzied winter months, but nonetheless higher than they had been a year and even a month ago.
On a year-over-year basis, the home price index was up by 8.9 per cent and the average selling price for all home types combined was up by 0.9 per cent to $1,079,500. However, the index was lower compared to July.
The seasonally adjusted average selling price was $1,130,463, up about two per cent month-over-month, but down about 12 per cent from $1,285,129, when the region experienced its highest average price in the last 12 months.
Monthly growth in the average price alongside a dip in the index suggests a greater share of more expensive home types sold in August, TRREB said.
New listings last month totalled 10,537, down less than one per cent from 10,615 last August.
"New listings are not rushing onto the market (lowest August since 2010) so, while the market balance is weak, it’s not crumbling dramatically," Kavcic said.
"But it’s soft enough to keep prices under pressure."
Parkinson noticed clients "becoming more comfortable with the new reality of the current cost of borrowing," after the Bank of Canada hiked its key interest rate by a full percentage point to 2.5 per cent in July.
Others were frustrated with the hike eating away at their buying power.
"Either they've disappeared and they're just out of the market or they've calmed down," she said.
Some were taking advantage of rate holds, Kavcic said, so the full impact of the rate increase might not be apparent in all the numbers yet.
"There is still a long way to go before this correction sorts itself out," he said. "You’ll know where this market is really settling by early next year."
This report by The Canadian Press was first published Sept. 2, 2022.
Tara Deschamps, The Canadian Press