GTA home sales down nearly 8% in October as buyers wait on the sidelines
Greater Toronto Area home sales fell 7.9 per cent year on year in October to 5,603 transactions, the Toronto Regional Real Estate Board said, as buyers held back amid uncertainty over inflation and borrowing costs. New listings dropped faster still, down 11.9 per cent to 14,173.
The pullback follows the Bank of Canada's decision to raise its benchmark interest rate by 25 basis points to 2.5 per cent, its first increase since July 2023, as it tries to contain inflation running at 3.1 per cent. Higher fuel prices could push costs further up across the economy, the central bank has warned.
"You essentially have both buyers and sellers sitting on the sidelines right now, waiting to see how things shake out with the economy, inflation and borrowing costs," Jason Mercer, TRREB's chief information officer, said. He added that the market has been feeling the impact of would-be rate hikes for two or three months.
The average selling price was $1,024,108, down 2.7 per cent from a year earlier, and the MLS Home Price Index composite benchmark fell 4.3 per cent. Mercer said the thinner market has nonetheless given buyers more choice and negotiating room, with new listings falling more sharply than sales. On a seasonally adjusted basis, both sales and new listings rose month on month from September.
Mercer cautioned that affordability has not returned to pre-pandemic levels, though prices remain well below their pandemic-era highs, which has softened the blow of higher borrowing costs for many households. He expects the usual seasonal slowdown in November and December, with trade developments, a resolution to the Middle East conflict and easing inflation needed to restore confidence. He also called for more diverse housing types, the "missing middle", as the region's population keeps growing.
