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Toronto home sales up in February from last year as consumers eye rate cuts

Greater Toronto home sales and listings were up in February from last year, but adjusted sales were down from a month earlier, the region's real estate board said Tuesday. A west-end Toronto home for sale is shown in this July 15, 2023 file photo. THE CANADIAN PRESS/Graeme Roy

TORONTO — Greater Toronto home sales and listings were up in February from last year, but adjusted sales were down from a month earlier, the region's real estate board said Tuesday.

Sales were up 17.9 per cent in February from last year to 5,607, or up 12.3 per cent when leap day is factored in, said the Toronto Regional Real Estate Board.

Population growth, a resilient economy and the possible end of rate hikes helped fuel the jump, said board president Jennifer Pearce in a statement.

"We have recently seen a resurgence in sales activity compared to last year," said Pearce.

"Consumers are now anticipating rate cuts in the near future. A growing number of homebuyers have also come to terms with elevated mortgage rates over the past two years."

The average selling price was up 1.1 per cent from last year to $1.11 million, and up a similar amount from January.

To minimize higher monthly payments, Pearce said some buyers have likely saved up a larger down payment, chosen to purchase a less expensive home type or looked to a different location in the Greater Toronto Area.

In the City of Toronto, there were 1,971 sales last month, up 13.7 per cent from February 2023. Throughout the rest of the GTA, home sales were up 20.4 per cent to 3,636.

"People always talk about, 'Well, where are the people that serve the community of Toronto going to live?'" said Toronto-based real estate agent Davelle Morrison with Bosley Real Estate Ltd.

"You have to look to some of these outlying areas to see where people can live and still can afford to buy a house."

Sales were up across all housing categories throughout the GTA, led by a 24.8 per cent year-over-year gain for townhouses. The number of detached homes that changed hands was up 21 per cent, followed by a 16.9 per cent gain for semi-detached and a 9.5 per cent increase for condo apartments.

"Although there's multiple offers on properties now — which we haven't seen in a couple of years — what's interesting is that the prices are not skyrocketing," Morrison said.

"People seem to be really holding to a price point, in terms of what they feel that they can spend or can afford on a property and they don't seem to be going above that."

On a seasonally adjusted basis, February sales were down 12 per cent from January. The month-over-month decline marks a reversal of two months in a row of double-digit growth that indicated a resurgent market.

The board said monthly figures can be volatile when the market is approaching a transition point.

New listings were up 33.5 per cent in February from last year to 11,396. 

While February was off the recent month-over-month trend, the board is anticipating further demand increase as the year goes on, said chief market analyst Jason Mercer.

“As we move through 2024, an increasing number of buyers will re-enter the market with adjusted housing preferences to account for higher borrowing costs," he said.

"In the second half of the year, lower interest rates will further boost demand for ownership housing."

Morrison said that forecast plays a key role in her advice to clients lately, noting more demand will bring higher prices once interest rates come down.

"There's this expression that you're going to 'Marry the house and date the rate,'" she said.

"The high interest rate that you're paying is a temporary thing. So if you can stomach that, then at least you'll get a property for something cheaper than if you waited next year. I think if you wait next year to buy that property, it's going to be a little bit more expensive."

This report by The Canadian Press was first published March 5, 2024.

Sammy Hudes, The Canadian Press

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