Homebuyers eying further interest rate relief: TRREB
July 30, 2024
June 2024 home sales in the Greater Toronto Area (GTA) were lower compared to the same month last year, according to the Toronto Regional Real Estate Board (TRREB). Despite the Bank of Canada rate cut on June 5, many buyers kept their home purchase decisions on hold. The market remained well- supplied, resulting in a slight dip in the average selling price compared to June 2023.
Initial relief
“The Bank of Canada’s rate cut last month provided some initial relief for homeowners and homebuyers,” says TRREB President Jennifer Pearce. “However, the June sales result suggests that most homebuyers will require multiple rate cuts before they move off the sidelines. This follows Ipsos polling for TRREB, which suggested that cumulative rate cuts of 100 basis points or more are required to boost home sales by any significant amount.”
GTA realtors reported 6,213 home sales through TRREB’s MLS system in June 2024 – a 16.4-per-cent decline compared to 7,429 sales reported in June 2023. New listings entered into the MLS system amounted to 17,964 – up by 12.3 per cent year-over-year.
The MLS Home Price Index Composite benchmark was down by 4.6 per cent on a year-over-year basis in June 2024. The average selling price of $1.16 million was down by 1.6 per cent over the June 2023 result of $1.18 million. On a seasonally adjusted monthly basis, both the MLS HPI Composite and the average selling price were up compared to May 2024.
Negotiating power
“The GTA housing market is currently well-supplied,” says TRREB Chief Market Analyst Jason Mercer. “Recent homebuyers have benefitted from substantial choice and therefore negotiating power on price. Moving forward, as sales pick up alongside lower borrowing costs, elevated inventory levels will help mitigate against a quick run-up in selling prices.”
“Despite a temporary dip in home sales due to high interest rates, we know that strong population growth is driving long-term demand for ownership and rental housing,” adds TRREB CEO John DiMichele. “Ontario has set the goal of 1.5 million more homes on the ground by 2031. This is only possible if all levels of government ensure actionable solutions with sustained effort, including continuing to remove red tape, avoiding financial barriers to home construction and minimizing housing taxes and development charges.”
The next Bank of Canada interest rate announcement is Sept. 4.