Home sales significantly down in June
Despite the Bank of Canada interest rate cut, The Toronto Regional Real Estate Board says home sales declined 16.4% in June compared to last year.
According to the board, 6,213 homes were sold in June compared to 7,428 last year in the same month.
The average selling price in the Greater Toronto Area was also down 1.6% year-over-year to $1,162,167.
Jennifer Pearce, president of TRREB, mentioned the bank's 25-basis-point cut last month gave an initial relief for the housing market. June sales data, however, "suggests that most homebuyers will require multiple rate cuts before they move off the sidelines."
The Bank of Canada began its rate-lowering process with a June 5 cut that brought its key interest rate down to 4.75% from 5%.
A cumulative rate cut of at least 100 basis points is needed to boost home sales by a significant amount, according to the Ipsos polling for TRREB.
"It's got to be a lot more than 25 basis points," said Vy Ngo, a sales representative with Big City Realty Inc. Brokerage.
The lack of a significant uptick in buyer demand after the rate cut announcement prompted an influx of supply around the GTA, according to Ngo. Sellers were more optimistic than buyers that it would create a rebound in activity after there weren't any spring markets this year.
"I guess all the sellers have been holding off for some time now. Everyone probably had the same idea, like 'let's wait till the rate cut,'" she said.
"So literally, as soon as that happened, there was this huge amount of new listings that came to the market."
23,613 active listings were on the market last month, up 67.4% from June of last year, with new listings rising 12.3% over the same period, with 17,964 properties put on the market last month.
“The GTA housing market is currently well-supplied. Recent homebuyers have benefited from substantial choice and therefore negotiating power on price," said TRREB chief market analyst Jason Mercer in a news release.
"Moving forward, as sales pick up alongside lower borrowing costs, elevated inventory levels will help mitigate against a quick run-up in selling prices."
Toronto saw 2,236 sales in June, a significant 20.6% decrease from a year ago. Meanwhile, home sales declined by 13.8% to 3,977 throughout the rest of the GTA.
It's not just homes that took a hit, as condo sales are down 28.1%, while townhouses and semi-detached homes fell 14.1% and 11.4%, respectively.
Ngo mentioned there are advantages to being a buyer despite the current conditions. The increased supply, along with the decrease in competition, means buyers have negotiating power.
"It's really hard to time the market," she said
"I have some that are holding to see where things go, but I do notice more people thinking about this than a couple of months ago."
