Toronto – A new report issued by the Toronto Regional Real Estate Board (TRREB) showed that home prices in the area fell by 3% in June compared to the previous month, with the real estate activity continuing to slow down despite the arrival of the spring season, which usually witnesses an increase in sales.

The report explained that the average selling price for all types of properties reached $1,110,000, down from $1,145,000 in May, while supply levels remained relatively high amid buyers' hesitation due to rising borrowing costs and ongoing economic uncertainty.

The Real Estate Board indicated that the number of sales recorded a decrease of 16% compared to the same period last year, with just over 6,200 sales recorded during the month.

Jason Mercer, chief market analyst at TRREB, said in a press release: "Despite expectations of improved activity with the arrival of spring, many potential buyers preferred to wait before making purchase decisions until interest rate trends become clearer."

Mercer added that the continued high supply levels compared to demand contributed to downward pressure on prices, noting that the market is currently witnessing a “rebalancing” phase that may continue during the summer.

The Real Estate Association expects sales pace to improve if the Bank of Canada cuts interest rates in the coming months, which could encourage more buyers to enter the market.