The regional real estate board in Toronto clarified that home sales in May fell by 21.7 percent compared to last year, but new listings continued to rise as homeowners expect an increase in demand.

The board stated that 7,013 homes exchanged hands during the month, compared to 8,960 homes in May of last year, which coincided with a brief market recovery.

The average selling price in the Greater Toronto Area declined by 2.5 percent year-on-year, reaching $1,165,691.

New listings surged by 21.1 percent during the same period, with 18,612 properties hitting the market last month.

TRREB Chair Jennifer Pearce stated that potential homebuyers, including many first-time buyers, are waiting for "clear signs" of declining mortgage rates to come off the sidelines, which would also provide relief for the tight rental market.

The Bank of Canada is scheduled to announce its latest interest rate decision this morning, which some economists expect could involve a rate cut.