Toronto home sales fall for second straight month

Toronto home sales fell 5.2 per cent in September, declining for the second straight month as higher mortgage rates and economic uncertainty weighed on prospective buyers.

There were 5,174 sales last month after removing seasonal influences, according to the Toronto Regional Real Estate Board. Before August’s drop in purchases, there had been five months of increasing sales.

“We started to see sales ebb as we moved into fall,” Jason Mercer, the board’s chief information officer, said in an interview.

Mr. Mercer attributed the reversal to the worsening trade dispute with the U.S., the prolonged war in the Middle East and rising borrowing costs.

Although mortgage rates did not immediately increase when Canada walked away from trade talks with the U.S. in August, home loans are starting to become more expensive.

The five-year fixed mortgage rate from national lenders averaged 4.87 per cent in early October, according to data from Wowa.ca, a personal finance website that tracks mortgage rates. That compares to 4.62 per cent in mid-August, prior to the collapse of the trade talks.

The last time monthly sales dropped this much was in February, when the number of transactions declined by 5.2 per cent.

Home values also fell for the second straight month. The home price index, which is the industry’s preferred measure, was $924,600 in September, according to the board. That was a month-over-month decrease of 0.5 per cent, after a 0.2-per-cent fall in August.

Compared to last September, the home price index was down 4.8 per cent. Condos continue to lose the most value, falling 6.7 per cent year over year.

Overall, condos in the city of Toronto did not lose as much value as the areas to the west and north of the city. In the Peel and York regions, the home price index for condos fell more than 8 per cent year over year.

Mr. Mercer said prospective homebuyers want to take advantage of the lower prices. But he said in a press release that they need confidence that “their employment situation will remain solid and inflation will not put pressure on borrowing costs over the long term.”

Last month, the number of homeowners that put their properties up for sale declined. New listings fell 3.8 per cent month over month.