Housing prices show signs of a drop in the Toronto area
As the Bank of Canada raises interest rates and sends signals that more hikes are on the way, it appears the red hot real estate market in Canada’s largest city is finally cooling down.
“We are starting to see significant drops in some communities of more than 20 per cent for single detached homes in the Greater Toronto Area (GTA)” said Michael Carney, the director of business development at HouseSigma.
HouseSigma is a website that monitors property values and market trends and said its latest data on housing price sales from Feb. 1, 2022 to April 19, 2022 shows there is evidence a pullback in real estate prices is underway.
According to its latest figures of GTA home prices, detached homes sold in February were selling for a median price of 12.1 per cent less in April, a price drop from $1.65 million to $1.45 million.
Semi-detached homes dropped 13.5 per cent in the same period from $1.33 million to $1.15 million and the biggest drop was in freehold townhouses which were selling for 22.6 per cent less a drop from $1.24 million to $960,000.
Condominiums had the smallest decrease of 6.8 per cent, a drop from $740,000 to $690,000.
HouseSigma found that bidding wars, which have been driving up prices, are not as common and more homes are being delisted and taken off the market.
"What we are seeing is a correction from the February months, but I would says the fundamentals for the GTA are still very strong," said Carney.
While no one is saying it's the beginning of a major crash, the price drops are significant as more potential buyers are taking a wait-and-see approach to real estate.
"Between February and March, we saw a moderate reduction in the average selling price for the GTA and that is across all home types," said Jason Mercer, chief market analyst with the Toronto Regional Real Estate Board (TRREB).
TRREB will release its own figures on housing prices next week, but it says when the Bank of Canada raised interest rates last month and signaled more hikes are likely later this year, it had a cooling effect on home prices.
“If you look back at past Bank of Canada rate tightening cycles, we found that once the Bank of Canada starts raising interest rates it does result in a reduction of sales as people reposition themselves in the marketplace," said Mercer.
TRREB said housing prices are still up by double digits over the year before and that while there may be decreases from month-to-month, immigration, high employment and a lack of housing supply means GTA housing prices will likely remain strong over the longer term.
When it comes to real estate it's about location, so some areas are seeing smaller price drops than others. As more people go back to the office in downtown Toronto, prices in the city's core have been more likely to hold their value.
CTVNews.ca Top Stories
'Some structural damage' from wildfire near Fort Nelson, B.C., mayor confirms
More than one home has been damaged or lost due to a massive wildfire outside of the B.C. community of Fort Nelson, the mayor confirmed Wednesday.
'Very expensive lunch': Sask. driver says he got a cellphone ticket for using his points app in the drive-thru
A warning from a Saskatoon driver about using your fast-food app while in the drive-thru line — a trip to get some free lunch cost him a lot more than he bargained for.
B.C. YouTuber ordered to pay $350K for 'relentless' online defamation campaign
An 'unrepentant' YouTuber has been ordered to pay $350,000 in damages as compensation for a 'relentless' campaign of defamation waged online against a business owner and his company, the B.C. Supreme Court has ruled.
Chief says grave search at B.C. residential school brings things 'full circle'
Chief Robert Michell says relief isn't the right word to describe his reaction as the search begins for unmarked graves at the site of a former residential school he attended in northern British Columbia.
'Endless Shrimp' just one misstep for Red Lobster as it eyes bankruptcy protection
While it's unclear what these closures might mean for the 27 restaurants in Canada, Red Lobster is expected to file for bankruptcy protection in the U.S. this month.
B.C. man shot sex worker in the back during drug-fuelled birthday, court hears
A man from B.C.'s Lower Mainland has been sentenced to four years behind bars after shooting a sex worker in the back during a drug-fuelled 43rd birthday.
'Inhumane conditions': 68 dogs pulled from Winnipeg home
Nearly six dozen dogs were seized from a home Wednesday morning by the Winnipeg Humane Society. It is the largest known seizure of animals in the city’s history.
Ontario's 'Crypto King' Aiden Pleterski arrested
Of the $40-million Aiden Pleterski was handed over two years, documents show he invested just over one per cent and instead spent $15.9 million on "his personal lifestyle." The 25-year-old Oshawa, Ont. man was arrested and charged with fraud and money laundering on Tuesday.
Driver said he smoked pot oil, took medication before Florida crash that killed 8 Mexican workers
A man with a long record of dangerous driving told investigators he smoked marijuana oil and took prescription drugs hours before he sideswiped a bus, killing eight Mexican farmworkers and injuring dozens more, according to an arrest report unsealed Wednesday.