Toronto home prices rise in May as sales jump 20%

<html xmlns=""><head><title>UPDATE 1-Toronto home prices rise in May as sales jump 20%</title></head><body>

Adds details throughout

By Fergal Smith

TORONTO, June 2 (Reuters) -Greater Toronto Area (GTA) home prices increased in May from April and sales rose sharply, adding to evidence that the housing market is recovering after a year-long slump, a factor that could support additional Bank of Canada rate hikes.

The average price of a GTA home rose to nearly C$1.2 million ($892,193) in May, up 3.7% from April, Toronto Regional Real Estate Board (TRREB) data showed on Friday.

It was the fourth straight month of gains, while the nationwide market has also picked up in recent months.

Signs of recovery in the housing market could fuel inflation. The BoC has left its policy rate on hold at a 15-year high of 4.50% since January but says it is prepared to tighten further to return inflation to its 2% target.

Money markets see a roughly 40% chance that the central bank will hike rates when it makes its policy decision next Wednesday. 0#BOCWATCH

On a year-over-year basis, the average home price remained lower, but the pace of decline slowed to 1.2% from 7.8% in April. The average price was 10.3% below the February 2022 peak.

Meanwhile, higher borrowing costs for developers have contributed to a slowdown in Canada's residential construction activity, which could thwart government plans to reduce a housing shortfall.

"The supply of listings hasn't kept up with sales, so we have seen upward pressure on selling prices during the spring," said Jason Mercer, chief market analyst at TRREB.

New listings fell 18.7% year-over-year in May. In contrast, sales rose 24.7% on an annual basis and were up 20% from April.

"The demand for ownership housing has picked up markedly in recent months," Mercer said. "Many home buyers have recalibrated their housing needs in the face of higher borrowing costs and are moving back into the market."

($1 = 1.345 Canadian dollars)

Reporting by Fergal Smith; Editing by David Gregorio and Emelia Sithole-Matarise


Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.