Toronto Home Sales Plunge Amid Economic Uncertainty

The Toronto housing market saw its steepest decline in home sales since February, as economic uncertainty weighed on buyers. According to data from the Toronto Regional Real Estate Board, seasonally adjusted sales dropped 5.2% in September from August, totaling 5,174 units. This marks the second consecutive month of decline and the largest drop since February.

The board’s home price index fell 0.5% month-over-month, seasonally adjusted, to C$924,600 ($648,296). On a year-over-year basis, home sales fell 9%, while new listings declined 14.4%, and the price index was down 4.7%. The Greater Toronto Area (GTA) includes Canada’s most populous city and four surrounding regional municipalities.

Jason Mercer, the board’s chief information officer, noted that there is substantial pent-up demand in the GTA, with many households intending to purchase a home in the coming months. However, he added that these potential buyers are waiting for more confidence in their employment situations and assurance that inflation will not drive up borrowing costs over the long term.

Bank of Canada Governor Tiff Macklem has indicated that policymakers are prepared to raise borrowing costs multiple times if inflation remains too high. This uncertainty is likely contributing to the cautious approach of potential homebuyers in the region.