Greater Toronto Area Home Prices Decline as Market Inventory Rises
Greater Toronto Area (GTA) home prices continued to face downward pressure in August, as the number of properties listed for sale exceeded the volume of transactions. The Toronto Regional real Estate Board (TRREB) reported the average sale price fell 5.2% year-over-year to $1,020,000,mirroring a 5.2% decrease in the composite benchmark price.
Despite the price declines, overall home sales saw a modest increase of 2.3% compared to August of the previous year, totaling 5,211 properties sold. However, sales were down 1.8% on a seasonally adjusted basis from July.
A significant factor contributing to the market dynamics was a substantial rise in new listings, up 9.4% year-over-year to 14,038. This increase led to a 22.4% jump in active listings, bringing the total number of homes available on the market to 27,495.
TRREB officials highlighted affordability challenges for average income earners. “A household earning the average income in the GTA is still finding it challenging to afford the monthly mortgage payment associated with the purchase of an average priced home,” stated TRREB chief information officer Jason Mercer, “This is even with lower borrowing costs and selling prices over the past year.”
sales trends varied by property type. While detached homes led the increase with a 5.9% rise, semi-detached houses and townhouses also experienced gains of 2.6% and 2.4% respectively. conversely, condominium sales were down 4.9% compared to August of the previous year.
Looking ahead, TRREB president Elechia Barry-Sproule suggested that potential interest rate cuts by the Bank of Canada could provide a boost to the market. “With the economy slowing and inflation under control, additional interest rate cuts…could help offset the impact of tariffs. Greater affordability would not only support more home sales but also generate significant economic spinoff benefits,” she said.
The Bank of Canada recently held its policy rate steady at 2.75% but indicated that further cuts may be considered, particularly considering ongoing U.S. tariffs.
Sales within the City of Toronto increased by 3.5% to 1,779 properties, while the remainder of the GTA saw a 1.7% increase, with 3,432 homes sold.
