A second interest rate cut in as many months hasn’t been enough to heat up the housing market in Toronto just yet, according to a recent report from the Toronto Regional Real Estate Board that saw home sales dip slightly in July compared to June.

Home sales in the GTA dropped from 6,213 in June to 5,391 in July, about a 1.7 per cent dip on a seasonally adjusted basis. New listings were also up year-over-year by 18.5 per cent, though they edged slightly lower on a seasonally adjusted basis compared to June.

Home prices also still haven’t bounced back, with the composite benchmark price down by five per cent year-over-year and the average selling price down by 0.9 per cent compared to July 2023, hitting $1,106,617. 

All segments of the market across the GTA saw price declines year-over-year: while detached homes only declined by 0.1 per cent, condo prices dropped by 2.2 per cent, semi-detached homes by 3.3 per cent and townhouses by 3.4 per cent. The only property type that bucked the trend was detached homes in the city of Toronto, which increased just barely by 0.5 per cent.

However, there are signs that show a recovery is on the horizon: home sales were up 3.3 per cent year-over-year, and on a seasonally adjusted monthly basis the average selling price and composite benchmark ever so slightly increased month-over-month by 0.2 per cent and 0.1 per cent, respectively.

Sales were up year-over-year for all property types with the exception of condos, which dropped by 1 per cent. Sales increased by 8.3 per cent for townhouses, 7.3 per cent for semi-detached homes and 3.3 per cent for detached homes.

“We may be starting to see a positive impact from the two Bank of Canada rate cuts announced in June and July. Additionally, the cost of borrowing is anticipated to decline further in the coming months. Expect sales to accelerate as buyers benefit from lower monthly mortgage payments,” said TRREB president Jennifer Pearce.

The Bank of Canada announced its first rate cut in four years in June, bringing the overnight rate down 25 basis points to 4.75 per cent. In July, the rate was cut by another 25 basis points to 4.5 per cent. Another few rate cuts are expected before the end of 2024, with experts predicting the overnight rate to land at at least 4 per cent.

TRREB chief market analyst Jason Mercer said buyers who enter the market in an attempt to take advantage of more affordable mortgage rates in the months ahead will benefit from a build up of inventory. “This will initially keep home prices relatively flat. However, as inventory is absorbed, market conditions will tighten in the absence of a large-scale increase in home completions, ultimately leading to a resumption of price growth.” 

A price forecast from Royal LePage is expecting a year-over-year increase of 10 per cent in the GTA by the fourth quarter of 2024, despite a distinct lack of demand that has persisted in the city over the past year.