For the second month in a row, the Average Sales price of GTA homes fell, and Total Sales also dropped. Is this normal?
Yes.
The standard for the GTA market in the summer is a slowdown that encompasses June, July, and August. Once the summer clears and the kids return to school, expect the market to pick back up.
So, if there’s a modest decline in both statistics in the summer, it’s expected.
But let’s get into what happened in detail during July.
GTA
After a 0.3% decline in the Average Sales price from May to June, prices fell to an average of $1,106,617 in July. That’s a 4.8% drop from June. As mentioned, the price has dropped every time during this period when there wasn’t a pandemic (2020). For recent comparisons, the same period in 2022 and 2023 experienced falls of 6.2% and 5.4%, so 2024’s decline is more minor.
Total Sales
It was a similar story with Total Sales, though a steeper decline. The 6,213 Total Sales in June fell to 5,391 in July (-13.2%). While a decline was expected during this summer period, the Total Sales number is up from the 5,220 sales in July of 2023 (+3.3%). When comparing 2024 sales with 2023, this year is a little behind.
New Listings
The fall continued with New Listings, from 17,964 in June to 16,296 in July (also -13.2%). A typical August sees few New Listings added, so I wouldn’t be surprised to see another drop when we evaluate the market next month. Again, however, when we revisit New Listings from July 2023, July 2024 had 18.5% more new listings than the 13,755 last year.
Active Listings
We see Active Listings up 1.1% from June. After growing 8.5% from May to June, July was up to 23,877 from 23,613. As inventory grows in the summer, it’s astonishing when Active Listing numbers from July 2023 are compared. Last July, there were only 15,360 Active Listings. That’s 55.4% lower than 2024. While these differences aren’t as significant as June and May, it’s still worth noting.
Toronto
For the second month in a row, the fall in the Average Sales price in the 416 was greater than the GTA. After a price of $1,173,781 in June, July averaged $1,087,436, a decline of 7.3%. It was similar for Total Sales, which dropped under 2,000 to 1,987 after 2,236 homes were sold in June, an 11.1% tumble.
The slower summer continued with 416 New Listings, which dropped to 6,074 from 6,820 in June (-10.9%). Unlike the GTA, Active Listings fell to 9,421 from 9,623 in June (-2.0%).
The Sales-to-New-Listings Ratio (SNLR) dropped in the City of Toronto to 37.7%, when 38.2% was established as June’s number. The GTA’s rate continued to shrink last month to 39.7% after 40.3% was recorded in June.
Summary
Overall despite a rate drop announcement in June, we saw buyer activity largely cool off in both the freehold and condo market but a much more pronounced impact in the latter. Properties that would have sold a few months ago sat idle. Seller’s by and large were not ready to adjust expectations so either they held back on listing or properties sat on the market without price adjustments. Typically once rates drop there is a lag before prices begin to increase so this isn’t atypical, although it does feel counterintuitive. The fall will likely bring more momentum however there will be an above average amount of inventory to soak up.
Outlook
After the Bank of Canada cut its interest rate for the second straight time in July, it’s now anticipated that two more cuts might come in September and October. While some banks expect continued decreases well into 2025, consumer confidence in the market remains low. These predictions are potentially holding some buyers back because they don’t want to buy when the market is expected to fall further. But if the property you want is out there, it might be time to buy before the market recovers or more competition emerges as we pass these quieter months!
Thinking of moving to the next stage? Let’s chat. Send me an email (hillary@hillarylane.ca) or text/phone (416-882-4707).
Photo by Pascal Debrunner on Unsplash
