There has been an uptick in Toronto home sales figures. But is everything really going to get back on track following consecutive rate cuts? Well, not quite yet as it seems. No doubt the July sales have shown an encouraging year-over-year improvement, but there is a downward trend month-over-month.
Bank of Canada slashed the interest rate for the first time in over four years from 5% to 4.75% back in June. Another cut followed in July, and it the interest rate came down to 4.5%. Market players as well as experts expected a movement in the market, however, there wasn’t that big a change.
As per GTA realtors, July saw sales of 5,391 homes through TRREB’s MLS system. It’s a 3.3% year-over-year rise compared to last year’s figure of 5,220 sales in July. But it’s not as straightforward as it seems due to interest rate fluctuations. Last year the interest rates were sky-high at 5% yet GTA sold 5,220 homes. This year given the borrowing rate is much lower, we wonder whether the sales figures should’ve been much higher.
Say what you may, many consider the uptick in sales to be an early sign of good days in the real estate market. In a statement, TRREB President Jennifer Pearce said, “It was encouraging to see an uptick in July sales relative to last year. We may be starting to see a positive impact from the two Bank of Canada rate cuts announced in June and July. Additionally, the cost of borrowing is anticipated to decline further in the coming months. Expect sales to accelerate as buyers benefit from lower monthly mortgage payments.”
Sellers are also becoming confident about the future of Toronto’s real estate market. Christopher Alexander, president of RE/MAX Canada said, “We’re in this situation where we have a lot of anticipation of many rate cuts this summer and likely into the fall and we have a lot of new listing inventory – we’re up almost 20% for the month of July… A lot of these people are eventual buyers. So, I think we’re starting to see signs of renewed life in Toronto’s market… We’re back in the market where most buyers want everything new, and if you’re not in that bucket as a seller, unless you’re priced super aggressively, you may be on the market for a long while.”
