Toronto home sales rise the most in four months on improved affordability

By Fergal Smith

TORONTO, June 4 (Reuters) - Greater Toronto Area home sales in May posted their biggest increase in four months, and prices edged higher as homebuyers took advantage of the recent improvement in affordability, Toronto Regional Real Estate Board data showed on Wednesday.

Seasonally adjusted sales increased 8.4% on a month-over-month basis to 4,693 units, the second straight month of gains and the biggest increase since January. TRREB's home price index edged up 0.1% to C$992,800 ($723,615), which was the first increase since November.

The Greater Toronto Area (GTA) includes Toronto, Canada's most populous city, and four surrounding regional municipalities.

“Looking at the GTA as a whole, homebuyers have certainly benefited from greater choice and improved affordability this year," TRREB President Elechia Barry-Sproule said in a statement.

On a year-to-year basis, the price index was down 4.5%, while sales declined 13.3% and new listings were up 14%.

Lower borrowing costs have also contributed to improved affordability. The Bank of Canada has lowered its benchmark interest rate by 2-1/4 percentage points since June 2024 to support the economy, which is expected to slow as the U.S. wages a trade war.

"All else being equal, sales should be up relative to 2024," said Jason Mercer, TRREB’s Chief Information Officer. "The issue is a lack of economic confidence."

Canada sends about 75% of its exports to the U.S.

($1 = 1.3720 Canadian dollars)