OTTAWA (Reuters) – Home sales in the Greater Toronto Area, the biggest urban region in Canada, rose sharply in October on a month-to-month basis, data showed on Wednesday, posting the biggest increase since December last year.
Seasonally adjusted sales increased 14% in October following a modest rise of 3.3% in September, according to Toronto Regional Real Estate Board data.
The August rise was the highest home sales increase in the area this year. It was below the last big jump in sales seen in December last year when transactions saw a jump of 21%, board data showed.
In physical volume terms, October saw sales of as many as 6,390 units, up from 5,707 units seen a month ago.
Sales and prices in Toronto are closely tracked by economists and realtors as they usually signal a trend that could unfold in bigger cities around the country.
Toronto accounts for two-thirds of Canada’s condominium sales and is considered a bellwether for other big metropolitan areas.
Average prices for homes were up 1.5% last month to C$1.13 million ($816,769), the highest percentage increase since June, while new listings reversed a largely increasing trend and fell 6.8%, the real estate board said in a release.
Due to high interest rates, many homeowners have been trying to sell their properties in the last few months but failed to do so as prospective buyers stayed away from the market in the hopes of purchasing after borrowing costs fall.
This led to a buildup of inventory and increasing listing numbers.
The Bank of Canada said last month that falling interest rates would likely bring activity back into the real estate market, after it reduced rates for the fourth time in a row, bringing it down to 3.75%.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said board President Jennifer Pearce.
On a year-over-year basis, sales were up 44.4% last month, the board said, adding that new listings were up 4.3% on an annual basis.
($1 = 1.3835 Canadian dollars)
(Reporting by Promit Mukherjee; Editing by Lisa Shumaker)