OTTAWA: Greater Toronto area home sales declined in May for a fourth straight month, while prices rose marginally, data showed on Wednesday, as home buyers waited for the central bank to start lowering borrowing costs.
Seasonally adjusted sales declined 1.8 per cent in May from the previous month, according to Toronto Regional Real Estate Board (TRREB) data. Average home prices increased 0.3 per cent to C$1.11 million (US$811,760), the highest since December, while new listings were up 2.6 per cent.
Home sales rose in December and January but have since been declining, as the Bank of Canada signaled it needed more evidence that inflation was cooling sufficiently before starting to lower its policy rate from a more-than-two-decade high of 5.0 per cent.
TRREB in a statement did not provide an explanation for the fall in sales in May, though it has previously said monthly figures can be volatile when the market is approaching a transition point.
The central bank's next rate decision is scheduled to be announced at 9:45 a.m. (1345 GMT) on Wednesday, when financial markets and economists see a strong chance of a 25 basis point cut.
On a year-over-year basis, home sales were down 21.7 per cent in May, while the average selling price was 2.5 per cent lower. New listings were up 21.1 per cent annually, which TRREB said was a sign that existing homeowners were anticipating an uptick in demand.
"While interest rates remained high in May, home buyers did continue to benefit from slightly lower selling prices compared to last year," TRREB Chief Market Analyst Jason Mercer said in the statement.
"Affordability is expected to improve further as borrowing costs trend lower. However, as demand picks up, we will likely see renewed upward pressure on home prices as competition between buyers increases," Mercer added.