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The decline in sales was partly due to Good Friday falling in March this year
Published on April 3, 2024 • Last updated 17 hours ago • 3 minutes reading time
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A house for sale in Toronto. The average benchmark price rose in March, TRREB said. Photo by Peter J. Thompson/National Post
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Toronto home prices rose in March but sales fell from a year ago, a mixed result that the region's real estate board attributed in part to an additional public holiday this month.
Benchmark home prices rose 2.5 per cent month-over-month and 0.3 per cent year-over-year to $1,121,615, according to monthly figures from the Toronto Regional Real Estate Board (TRREB). However, the number of homes changing hands fell 4.5 percent year-on-year to 6,560 units. New registrations rose by 15 percent in the same period.
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In a press release, TRREB said the decline in sales was partly due to Good Friday falling in March rather than April this year.
TRREB President Jennifer Pearce said market conditions were improving despite the slowdown and lower borrowing costs expected later in the year would accelerate that trend.
“We have seen a gradual improvement in market conditions over the last quarter,” Pearce said in the report. “More buyers have adapted to the higher interest rate environment. At the same time, homeowners may be anticipating an improvement in market conditions in the spring, which explains the significant increase in new listings so far this year.”
Pearce said if borrowing costs fall in the near term, sales will likely increase, new listings will be absorbed and tighter market conditions will drive up sales prices.
TRREB chief market analyst Jason Mercer also said prices are expected to rise in the coming months if borrowing costs fall as expected.
“Price growth is expected to accelerate in the spring and even more strongly in the second half of the year as sales growth catches up with supply growth and seller market conditions begin to improve in many neighborhoods. Lower borrowing costs in the coming months will help boost demand for condominiums,” Mercer said in the report.
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While TRREB maintained an optimistic outlook for the spring market, economists and industry observers are more cautious.
Desjardins economist Marc Desormeaux said market conditions and economic performance don't look particularly robust this spring.
“We would not necessarily interpret TRREB's March results as an indication of great strength in the market or economy. You know, sales were down year-over-year. “The average price has only increased by about one percent year-on-year, which is below the inflation rate,” said Desormeaux.
In a strategy report released Wednesday, National Bank of Canada investment adviser Darren King said he believes the national economy will continue to underperform even after the first rate cut.
“We will be keeping a close eye on housing market developments over the next few months, particularly as we expect the Bank of Canada to cut its federal funds rate in July as the national economy is expected to remain sluggish,” King said.
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The Toronto market saw condo sales decline the most, falling 12.8 per cent year-over-year and 6.2 per cent from February to March. Condo listings also rose for the ninth time in 10 months, resulting in a record number of listings on a seasonally adjusted basis, according to an analysis by National Bank Financial.
Year-on-year, sales of single-family homes fell by three percent, while sales of semi-detached homes increased by 4.3 percent and those of terraced homes increased by 1.1 percent.
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