Active listings in September were 7 per cent higher than in August and 19 per cent higher than in September of last year.Graeme Roy/The Canadian Press
Toronto home sales picked up again in September after a brief lull in August as prospective homebuyers took advantage of a drop in mortgage rates.
Activity has been bubbling up since the spring, with sales increasing almost every month since April. There were 5,765 transactions in September after removing seasonal influences, according to the Toronto Regional Real Estate Board, or TRREB.
That was up 2 per cent from August and up 7 per cent from September of last year, when mortgages were more expensive. Activity is still lower than the norm, however, with September sales coming in at 27 per cent below the 10-year average for that month.
The Bank of Canada made its latest interest-rate cut last month, which helped push rates on some five-year mortgage terms below 4 per cent. That has made buyers more comfortable wading into the market.
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TRREB chief market analyst Jason Mercer said a lower average selling price and lower borrowing costs have also helped prospective buyers. However, he added that further cuts to interest rates would make it easier for more buyers to make a purchase.
“A household earning the average income in the greater Toronto area is still finding it challenging to afford the monthly mortgage payment associated with the purchase of an average priced home,” Mr. Mercer said in a Friday news release.
Although fewer homeowners put their properties up for sale last month, active listings in September were 7 per cent higher than in August and 19 per cent higher than in September of last year.
The abundance of properties on the market has given buyers the upper hand in negotiations.
The home price index, which excludes the highest-priced transactions, was $971,500 last month on a seasonally adjusted basis. That was 0.5 per cent lower than August and marked the 10th straight month where home prices fell or were stagnant. Compared with a year earlier, the home price index is down 5.6 per cent.
Every type of property has lost value over the past year, but condos have shouldered the steepest drop, with the Toronto area deluged with new condos coming on the market.
The home price index for condos is down 8 per cent year-over-year, with some of the city’s neighbouring suburbs seeing bigger declines.
In the Halton region, to the west of the city, the home price index for condos was down 11 per cent year-over-year. In York region, north of the city, the index was down by 9 per cent.