Greater Toronto home sales fall amid affordability challenges but relief forecasted

TORONTO — Greater Toronto home sales fell six per cent last month compared with November 2022 despite an influx in new listings, as high borrowing costs and uncertain economic conditions persisted.

The Toronto Regional Real Estate Board said Tuesday there were 4,236 home sales in the region last month, compared with 4,507 a year earlier. The sales figures for last month were also down 8.7 per cent from the 4,640 in October of this year.

“Not many people are moving,” Toronto realtor Nasma Ali said.

“The only kind of desperation that we’re seeing right now are from people who really need to sell, usually from investors.”

The board said a lack of affordability has taken its toll on the market, which remains sensitive to the current environment of high interest rates, but that relief seems to be on the horizon.

“Bond yields, which underpin fixed-rate mortgages have been trending lower and an increasing number of forecasters are anticipating Bank of Canada rate cuts in the first half of 2024,” TRREB president Paul Baron said in a news release.

“Lower rates will help alleviate affordability issues for existing homeowners and those looking to enter the market.”

The average home price last month was $1,082,179, which was essentially flat compared with November 2022 as the market saw more supply come online.

Across the GTA, sales declined on a yearly basis in all categories except for semi-detached homes, which saw a 6.6 per cent uptick in the number that changed hands.

Ali, the founder of the One Group, part of Real Brokerage, said she’s seen condo sales slow down in particular, especially when compared with the longer term.

“For the past few years, minus a few months during COVID, condos were selling immediately, within one day or within a week,” she said.

“Now they’re just sitting there waiting for any takers and there’s barely any showings. We used to have 100 showings maybe in a week. Now we’re lucky if we have two to three showings a week.”

In the City of Toronto, there were 1,607 sales last month, a 10.2 per cent drop compared with the same time in 2022. Throughout the rest of the GTA, home sales declined 3.2 per cent to 2,629.

Ali said some neighbourhoods are taking a big hit, especially for homes where potential buyers see red flags like nearby construction.

“Buyers have no urgency … because if anything, prices will be maybe down next month,” she said.

“When you look at urban neighbourhoods, like High Park, Roncesvalles, Leslieville, obviously it’s not like what it was at the peak and the price has also come down from the peak.”

Overall, new listings rose 16.5 per cent to 10,545 in November compared with 9,053 during the same month last year.

“Home prices have adjusted from their peak in response to higher borrowing costs,” said TRREB chief market analyst Jason Mercer in a statement.

“As mortgage rates trend lower next year and the population continues to grow at a record pace, expect demand to increase relative to supply. This will eventually lead to renewed growth in home prices.”

This report by The Canadian Press was first published Dec. 5,2023.

Sammy Hudes, The Canadian Press

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