Toronto home sales fall in August, ending five-month rebound

Toronto home sales fell in August, ending a five-month rebound in activity, as the U.S.-Canada trade war intensified and gave some potential homebuyers reason to pause.

The city and surrounding area saw 5,484 property transactions last month, according to the Toronto Regional Real Estate Board. That was 1.3 per cent lower than July, 28 per cent below the 10-year average for August, and the first monthly sales decline since February.

Activity slowed in a month when trade talks with the United States collapsed, injecting more uncertainty into the market.

Although mortgage rates remained somewhat steady last month, the board said would-be buyers are worried that borrowing costs will rise.

“The main hold-back for many households has been concerns around trade with the United States and the potential for higher inflation and borrowing costs in the future,” TRREB chief information officer Jason Mercer said in a statement.

The average interest rate on a five-year fixed mortgage stayed at 4.8 per cent after trade negotiations fell apart in August, according to rate comparison website Ratehub.ca.

“If the trade war persists, weakening economic sentiment could weigh on sales activity even if mortgage rates remain relatively stable,” Jamie David, Ratehub’s vice-president of marketing and mortgages, said in a statement.

Ms. David said worsening trade problems could put the housing market’s recovery back on hold, similar to what occurred when the U.S. introduced the first round of tariffs last year.

The Toronto region is the country’s largest real estate market. Its activity has helped bolster national sales over the past few months.

From July to August, the Toronto region’s home price index fell 0.1 per cent to $931,200. Compared with a year ago, the typical home price was down 4.5 per cent.

The steepest year-over-year declines happened to the north of the city of Toronto in York Region, where the home price index fell 6.2 per cent.

In comparison, the city of Toronto’s home price index declined by 3.7 per cent. In Halton, a wealthier area to the west of the city, the typical home price was down 3 per cent.

Condos across the Toronto region continued to lose the most value, falling 7.1 per cent year-over-year. In comparison, detached houses in the Toronto region decreased by 4.5 per cent.