Toronto home sales plunge on economic uncertainty and inflation fears

The Greater Toronto Area (GTA) saw its sharpest decline in home sales in seven months during September, driven by economic uncertainty. Seasonally adjusted sales dropped 5.2% from August to 5,174 units, the largest monthly drop since February. The Toronto Regional Real Estate Board's home price index also fell 0.5% month-over-month to C$924,600 ($648,296).

Despite the decline, the board's chief information officer, Jason Mercer, noted significant pent-up demand. Many households plan to buy homes but are waiting for more economic stability, particularly regarding employment and borrowing costs. Mercer highlighted concerns over inflation potentially increasing long-term borrowing costs.

On a year-over-year basis, home sales fell 9%, while new listings declined 14.4% and the price index dropped 4.7%. Bank of Canada Governor Tiff Macklem has indicated that policymakers are prepared to raise borrowing costs multiple times if inflation remains elevated.