Toronto home prices fall for second month as new listings surge

TORONTO home prices dropped for a second straight month as hopes for a market rebound prompted sellers to rush back in faster than buyers.

The benchmark price of a home in Canada’s largest city slipped 0.5 per cent to C$1.079 million (S$1.034 million) in September from a month earlier, according to data released on Thursday (Oct 3) by the Toronto Regional Real Estate Board. That came as the number of properties hitting the market surged 9.8 per cent on a seasonally adjusted basis, outpacing the 3.3 per cent increase in sales.

Last month, the Bank of Canada cut interest rates for the third meeting in a row, prompting speculation that lower mortgage rates would spur a rebound in the housing market. But so far, new supply is flooding the market, keeping a lid on prices and giving buyers more negotiating power. 

The same trend played out on an annual basis as well. While September sales climbed 8.5 per cent from a year ago, the increase was outpaced by a nearly 11 per cent surge in new listings, the real estate board data showed. That pushed the benchmark price down around 5 per cent.

“The ability to negotiate on price led to moderate year-over-year price declines, particularly in the more affordable condo apartment and townhouse segments, which are popular with first-time buyers,” Jason Mercer, the Toronto real estate board’s chief market analyst, said in a statement.

But every rate cut helps more households in the area afford homeownership, according to Jennifer Pearce, the board’s president. Economists expect the Bank of Canada to continue cutting its benchmark rate to 3 per cent by the end of April from the current level of 4.25 per cent. BLOOMBERG