What's happening in Toronto's Housing Market? A breakdown on July 2024

In July, home prices in the Greater Toronto Area (GTA) fell nearly 5% from June due to an increase in new listings and fewer buyers, combined with the typically slow summer market. The average price for all property types dropped to $1.106 million, marking a 4.7% month-over-month decrease and a nearly 1% decline from July last year, as reported by the Toronto Regional Real Estate Board (TRREB).

TRREB market analyst Jason Mercer noted that summer usually sees a price dip, which was evident this year due to increased buyer choices. On a seasonally adjusted basis, prices remained stable. Townhomes and semi-detached homes experienced the largest drops, at 3.4% and 3.3% respectively.

Mercer explained that variations in property quality, size, and location, especially among townhomes and semi-detached homes, influence monthly price changes. Sales decreased by around 13% month-over-month but saw a 3.3% year-over-year increase, reflecting the positive impact of the Bank of Canada's interest rate cuts. The bank's two consecutive 0.25 percentage-point cuts in June and July brought the key rate to 4.5%.

Mercer expects continued benefits from these cuts, with a better market sense emerging in 2025. An Ipsos poll suggests homebuyers need at least a full percentage-point decrease from the Bank of Canada to re-enter the market, anticipated by year's end.

New listings grew annually by 18.5%, giving buyers ample choices and creating a buyer’s market, with a sales-to-new listings ratio of 33%. TRREB president Jennifer Pearce highlighted an encouraging sales uptick in July compared to last year, attributing it to the rate cuts and predicting further sales acceleration due to declining borrowing costs.

Year-over-year, sales for detached, semi-detached, and townhomes increased by 3.3%, 7.3%, and 8.3% respectively, while condo sales fell by 1%. Mercer noted that buyers currently have strong negotiating power and, as they take advantage of more affordable mortgage payments, inventory will be absorbed, leading to eventual price growth as market conditions tighten.