In its comment on the housing sales situation, the Toronto Regional Real Estate Board said that August sales fell by 34 percent from last year, but rose by almost 15 percent from July, as buyers returned to the market to take advantage of prices that had retreated from the high winter levels.
 

The board said on Friday that the month’s sales reached 5,627 compared to 8,549 in last August and 4,900 in July 2022.
 

This 34 percent year-over-year decline represented a slower rate of decrease than the previous four months, but it comes at a time when the real estate market in the region has cooled significantly from the hot conditions experienced earlier in the year.

The recent rise in interest and mortgage rates has also hampered sales and started to affect prices, ending bidding wars and encouraging potential buyers to sit on the sidelines and wait for further price drops.

Those who ventured into the market in recent weeks found prices lower than those seen in the heated winter months, but still higher than they were a year or even a month ago.

Year-over-year, the home price index rose 8.9 percent, and the average selling price for all types of homes combined increased by 0.9 percent to $1,079,500. However, the index was lower compared to July.
 

The seasonally adjusted average selling price was $1,130,463, up about 2 percent month-over-month, but down by about 12 percent from $1,285,129, when the region saw its highest average price in the past 12 months.

Tripp said that the monthly growth in the average price alongside the decline in the index indicates a bigger share of more expensive home types sold in August.

Total new listings last month were 10,537, a decrease of less than 1 percent from 10,615 in last August.

The board also used its monthly real estate report to call for a policy change.

On the other hand, the board wants the Office of the Superintendent of Financial Institutions to consider removing the stress test for current mortgage holders who want to shop for the best possible rate at renewal instead of forcing them to stay with the current lender to avoid the stress test.

The stress test sets the qualification for uninsured mortgages either at two percentage points above the contract rate or 5.25 percent, whichever is higher.

Kevin Krueger, TRREB’s president, said in a statement, “There is room for the federal government to provide greater housing affordability for current homeowners by removing the stress test when existing mortgages are transferred to a new lender, allowing for greater competition in the mortgage market.”

He explained, “Furthermore, allowing longer mortgage renewal periods would help current homeowners in a better environment to face inflation where daily costs have risen significantly.”