July saw a modest rise in home sales, listings, and prices compared to the same period last year in the city's real estate market. However, signs of deceleration are evident as the impact of increasing interest rates begins to ripple through the market.

Specifically, the real estate market achieved 5,250 sales last month, marking a 7.8% increase from July 2022. Paul Baron, the board's president, interprets this upturn as an indication that households are adapting to the elevated borrowing costs. This adaptation is a response to the Bank of Canada's initiative to curb stubbornly persistent inflation through a series of interest rate hikes. However, despite this seemingly positive trend, the data suggests a slowdown in sales momentum. July became the second consecutive month witnessing a decline in sales, registering nearly 30% down from June and a substantial 42% decrease from May. A quick succession of interest rate hikes last year initially led to an uptake in market activity, but further increases and ongoing high inflation have resulted in market jitters. The new market conditions have prompted many potential buyers to pause their search, waiting for anticipated price decreases or more favorable mortgage rates. Similarly, sellers are hesitating to list their properties as the fervent bidding wars characteristic of the early COVID-19 pandemic period have cooled, indicating a significant shift in buyer sentiment. The average selling price in July increased by 4.2% from the previous year, standing at $1,118,374. But, in a noteworthy turn, prices have started to trend lower from June on a seasonally adjusted basis, showing a 0.7% decline. This July price decrease is the first of its kind since February. Overall, 2023 appears to be a year of complexity and uncertainty for the Toronto real estate market, dominated by fluctuations in interest rates, inconsistent buyer demand, and an economy striving for stability. All of this paints a complex picture for both buyers and sellers in Toronto's real estate market, setting the stage for a very interesting year ahead.