Toronto: Home sales across the Greater Toronto Area (GTA) have declined for the first time in six months as trade tensions and borrowing cost concerns weigh on buyers.
Seasonally adjusted home sales in the GTA fell 1.3 percent in August from July to 5,484 units. The drop has ended a run of monthly gains that began in March and had supported steady activity in the housing market.
The Toronto Regional Real Estate Board (TRREB) also reported a modest monthly decline in home prices. The board’s seasonally adjusted home price index fell 0.1 percent from July to C$931,200 ($672,784).
The GTA includes Toronto as well as 4 surrounding regional municipalities. The latest figures point to a more cautious housing market as economic uncertainty continues to affect household decisions.
Jason Mercer, chief information officer at TRREB, remarked that the concerns about trade with the United States have been a major factor holding back some households. Potential inflation and higher borrowing costs in the future have also added to uncertainty among buyers.
The Bank of Canada kept its key policy rate at 2.25 percent on September 2. Governor Tiff Macklem noted that the policymakers were prepared to raise borrowing costs multiple times if inflation remained too high.
The interest-rate outlook comes as trade tensions between Canada and the United States have added pressure to the economic environment. The United States imposed new 50 percent tariffs on C$20 billion ($14.5 billion) of Canadian imports in August after trade talks between the 2 countries collapsed.
The GTA housing market has also weakened compared with a year earlier. Home sales were down 2.1 percent year over year in August. New listings fell 14.1 percent during the same period.
The home price index was also 4.5 percent lower than a year earlier. The annual decline suggests that buyers and sellers are entering a market where prices remain below last year’s levels while economic and borrowing-cost concerns continue to influence demand.
The August figures mark a shift for the GTA housing market after several months of improving sales. Trade uncertainty and the prospect of higher inflation and interest rates are now creating additional caution among prospective buyers.
POPULAR | UNEP warns global temperature rise set to exceed 1.5C soon
