Urban residential street with row of attached old houses with gables

May 2024, was a softer month for home sales compared to last spring’s brief surge, according to the latest findings from the Toronto Regional Real Estate Board (TRREB).

Many rate-sensitive buyers will likely re-enter the Toronto market in the near future now that the Bank of Canada has made its first cut to the overnight lending rate in more than four years. Meanwhile, homeowners are getting ready for a possible boost in demand, shown by the year-over-year rise in new listings.

“Recent polling from Ipsos indicates that home buyers are waiting for clear signs of declining mortgage rates. As borrowing costs decrease over the next 18 months, more buyers are expected to enter the market, including many first-time buyers,” said Jennifer Pearce, president of TRREB, in the board’s May release. “This will open up much needed space in a relatively tight rental market.”

May sales drop more than 20% year over year

Greater Toronto Area REALTORS® reported 7,013 home sales through TRREB’s MLS® System in May 2024, a 21.7% drop from the 8,960 sales reported in May 2023.

Meanwhile, the MLS® Home Price Index Composite benchmark fell by 3.5% year over year. The average selling price last month was $1,165,691, down 2.5% from $1,195,409 in May 2023. Comparing the month-to-month trend, Toronto home prices edged up slightly compared to April 2024.

“While interest rates remained high in May, home buyers did continue to benefit from slightly lower selling prices compared to last year. We have seen selling prices adjust to mitigate the impact of higher mortgage rates,” said Jason Mercer, TRREB’s Chief Market Analyst. “Affordability is expected to improve further as borrowing costs trend lower. However, as demand picks up, we will likely see renewed upward pressure on home prices as competition between buyers increases.”

More listings, more choices

Homebuyer hopefuls in Toronto currently have more options to choose from, as there were more homes on the market than there were at this time last year. TRREB reported 18,612 new listings in May 2024, up 21.1% from May 2023.

“In order to have an affordable and livable region over the long term, we need to see a coordinated effort from all levels of government to alleviate our current housing deficit and to provide housing for new population moving forward,” said TRREB CEO John DiMichele. “On top of this, governments need to ensure the delivery of infrastructure to support our growing population. The economic health and liveability of our region depends on the timely completion of public transit projects including better transparency and clear timelines on the completion of the Eglinton Crosstown LRT.”