(Bloomberg) -- Toronto home sales rose slightly in August as lower rates pulled more buyers into the market.
Home transactions in Canada’s largest city were up 0.6% in August from a month earlier, according to seasonally adjusted data released Thursday by the Toronto Regional Real Estate Board.
But stronger levels of inventory are putting a lid on prices. New listings were up compared with a year earlier. The total number of active listings was 46% higher than August 2023, helping to keep a benchmark measure of prices at C$1.09 million ($806,000), according to TRREB data.
That benchmark price was little changed from July and 5% lower than a year earlier.
“Even as demand picks up, especially in 2025, it will take time for the inventory of listings to be absorbed,” Jason Mercer, the real estate board’s chief market analyst, said in a news release. “Ample choice in the market will help keep price growth moderate, at least in the initial phases of recovery.”
The country’s housing market is likely to be helped in the near term by falling borrowing costs. On Wednesday, the Bank of Canada cut its policy interest rate for a third time since June, lowering it by 25 basis points to 4.25%. That will immediately make variable mortgage rates cheaper — and more relief is on the horizon, with officials saying it’s “reasonable” to expect additional easing.
“As mortgage rates continue to trend lower this year and next, we should experience an uptick in first-time buying activity, including in the condo market,” said TRREB President Jennifer Pearce.
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