Toronto-area home prices plunge more than 5% in June — the largest year-over-year drop in years
It's the fifth consecutive year-over-year decline for GTA house prices, with the total decline from the February 2022 peak now sitting at more than 20 per cent.
The average selling price fell to $1.101 million in June, a 5.4 per cent year-over-year fall and the largest annual price decline since April 2023, which saw a 7.8 per cent price drop. Detached homes were hit particularly hard, with a 6.5 per cent drop year-over-year.
Despite some month-over-month momentum, which saw sales increase slightly in June compared with May, many would-be homebuyers remained on the sidelines due to economic uncertainty, according to the Toronto Regional Real Estate Board's (TRREB) June report. Sales declined slightly by 2.4 per cent annually in June.
'The GTA housing market continued to show signs of recovery in June. With more listings available, buyers are taking advantage of increased choice and negotiating discounts off asking prices,' TRREB president Elechia Barry-Sproule said in the report.
'Combined with lower borrowing costs compared to a year ago, home ownership is becoming a more attainable goal for many households in 2025.'
Historically, April, May or June will have the best month in terms of sales for the year, and this year June fared better than the spring months, said TRREB's chief information officer, Jason Mercer.
Interest rates are lower than this time last year and the average price of homes has fallen, offering some relief for buyers, he added.
New listings in June amounted to 19,839 — up by 7.7 per cent year-over-year, with the sales-to-new-listings ratio hitting 31 per cent, meaning it's a buyers' market, where buyers have more choice and ability to negotiate better terms.
The economic turbulence with the U.S. is impacting consumer confidence, leading to fewer people buying and selling, said Mercer.
'A firm trade deal with the U.S. accompanied by an end to cross-border sabre-rattling would go a long way to alleviating a weakened economy and improving consumer confidence,' he said.
On top of this, 'two additional interest rate cuts would make monthly mortgage payments more comfortable for average GTA households. This could strengthen the momentum experienced over the last few months and provide some support for selling prices.'
In April and June, the Bank of Canada held its key interest rate at 2.75 per cent. If the central bank were to drop its rate to 2.25 per cent, it would have a meaningful impact, Mercer said.
In Toronto, the 6.5 per cent year-over-year drop in detached home prices was the largest decline, followed by townhomes at 5.3 per cent, condos at 4.3 per cent, and semi-detached homes at 0.4 per cent.
Prices for detached homes could have fallen because fewer 'higher-end' or luxury homes sold this year compared with last, Mercer said.
For sales, semi-detached homes saw the largest sales increase year-over-year by almost 19 per cent. That's because the 'stock is at a more affordable price point for single-family homes' and for 'first-entry buyers,' he added.
The Bank of Canada's next interest rate announcement is July 30, and if it cuts its key interest rate it could provide some momentum heading into the fall market.
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