Interest Rate Cuts And Sales Figures
Bank of Canada has been on an interest rate cut spree. Though a source of relief to people looking for their new abode, the latest sales results show buyers need multiple rate cuts before they’d be able to afford a home in Hogtown.
A Bank of Canada interest rate cut set June in motion, and many expected the sales to shoot up. Even experts had predicted a rise in sales figures. However, Greater Toronto Area (GTA) sales remained on the surface defying the expectations.
TRREB’s Data
As per the Toronto Regional Real Estate Board (TRREB), home sales through the MLS system experienced a 16.4% year-to-year drop in sales. The numbers dropped from 7,429 in June 2023 to 6,213 in June 2024.
TRREB’s data points to a sales trend favoring the detached home segment. Of the entire sales, 2988 were detached home sales followed by 1054 townhouse sales, 1520 condo sales, and 599 semi-detached home sales.
What Do Experts Say?
Moshe Lander, a senior economics lecturer at Concordia University told STOREYS, “If what we’re looking at is housing affordability, then… an interest-rate cut is merely going to fuel the market further still — and that’s going to be across all Canadian markets.”
TRREB President Jennifer Pearce said of the situation, “The Bank of Canada’s rate cut last month provided some initial relief for homeowners and home buyers. However, the June sales result suggests that most home buyers will require multiple rate cuts before they move off the sideline.”
TRREB Chief Market Analyst Jason Mercer highlighted, “Recent home buyers 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.”
