Toronto home sales and listings increased in February compared to the previous year’s data. However, sales were lower than last month when this data was adjusted for seasonal factors.
Toronto Home Sales Statistics
According to the data published by the Toronto Real Estate Board, in February, Toronto home sales increased by 17.9% from last year to 5607 or by 12.3% when leap day is considered. Jennifer Pearce, Board President, believes that the increase in Toronto home sales was majorly due to population growth, a strong economy, and the possibility of an end to rate hikes.
Pearce said there has been an increase in Toronto home sales activity recently compared to last year. She added that this might be due to possible rate cuts in the near future due to declining inflation rates. Moreover, she believes that the Canadian public is coming to terms with the high mortgage rate that has been set in the last 2 years.
However, when adjusted for the seasonal factors, February sales have decreased by 12% compared to January’s. This decline comes after two consecutive months of double-digit growth, showing the possibility of a shift in the market.
The board also noted that monthly figures are usually volatile whenever there is a transitional period in the market. In February, the number of new listings increased by 33.5% compared to last year, reaching 11396.
Moreover, the average selling rise increased by 1.1.% from the previous year to $1.11 million, showing a similar increase in January.
According to Jason Mercer, Chief Market Analyst, the board is still expecting the demand to increase as the year moves on even though February showed a break from the recent trend which was being seen in month-over-month sales.
He added that as 2024 goes on, more buyers will return to the market with adjusted housing preferences as there will be higher borrowing costs. He said that the lower interest rates in the second half of the year will also increase the demand for homeownership.
When will Rates Cuts Happen?
Most economists believe that the Bank of Canada will lower its interest rates soon. However, as the bank is getting ready to make the announcement on Wednesday regarding its latest economic decision, one economist has said that due to the strong housing market currently and the supportive federal budget, there is a chance for the cyst to get delayed until the fall.
However, some economists believe that the bank might lower the current 5% overnight rate in spring. However, Derek Holt, Head of Capital Markets Economics at the Bank of Canada, has said that a possible rate cut in April would be a bad move for the central bank.
Derek is also unsure about the rate cut in June as the market, and most predictions are stable right now. He believes that the decrease in core inflation in January was just temporary and that the data might show a rise in inflation. He added that he expects the first rate cut to happen in September, contrary to everyone’s predictions.
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