‘Signs of recovery’: Toronto-area home prices drop more than 5 per cent since last June

In June this year, the average price of a home in the Greater Toronto Area fell by more than five per cent compared to the same month last year. This marked the largest year-over-year drop in years and caught attention as a possible turning point in the housing market.

Home sales rose for the third month in a row, reaching a five month high in June. This uptick in activity came alongside a growing number of homes for sale and lower borrowing costs, giving buyers more room to negotiate.

In July, this trend continued. Home sales saw their biggest monthly climb in nine months, while prices softened a bit more. Overall, the home price index was down roughly 5.4 per cent from a year earlier, even as sales jumped nearly 11 per cent and new listings increased.

Still, despite the improved affordability, many households in the GTA are struggling. Even with lower prices and interest rates, the cost of homeownership remains out of reach for average earners.

Experts say that more relief may come if borrowing costs decrease further and if trade tensions ease. The Bank of Canada, having already reduced rates by over two percentage points since June 2024, may offer more support if economic conditions improve with a stable U.S. trade relationship.

Taken together, these changes are being called signs of recovery. After several months of quiet or falling prices, June and July saw more listings, more sales and softer prices, all factors that could help more people step into the housing market.