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
'They needed people inside Air Canada:' Police announce arrests in Pearson gold heist
Police say one former and one current employee of Air Canada are among the nine suspects that are facing charges in connection with the gold heist at Pearson International Airport last year.
House admonishes ArriveCan contractor in rare parliamentary show of power
MPs enacted an extraordinary, rarely used parliamentary power on Wednesday, summonsing an ArriveCan contractor to appear before the House of Commons where he was admonished publicly and forced to provide answers to the questions MPs said he'd previously evaded.
Leafs star Auston Matthews finishes season with 69 goals
Auston Matthews won't be joining the NHL's 70-goal club this season.
Trump lawyers say Stormy Daniels refused subpoena outside a Brooklyn bar, papers left 'at her feet'
Donald Trump's legal team says it tried serving Stormy Daniels a subpoena as she arrived for an event at a bar in Brooklyn last month, but the porn actor, who is expected to be a witness at the former president's criminal trial, refused to take it and walked away.
Why drivers in Eastern Canada could see big gas price spikes, and other Canadians won't
Drivers in Eastern Canada face a big increase in gas prices because of various factors, especially the higher cost of the summer blend, industry analysts say.
Doug Ford calls on Ontario Speaker to reverse Queen's Park keffiyeh ban
Ontario Premier Doug Ford is calling on Speaker Ted Arnott to reverse a ban on keffiyehs at Queen's Park, describing the move as “needlessly” divisive.
'A living nightmare': Winnipeg woman sentenced following campaign of harassment against man after online date
A Winnipeg woman was sentenced to house arrest after a single date with a man she met online culminated in her harassing him for years, and spurred false allegations which resulted in the innocent man being arrested three times.
Woman who pressured boyfriend to kill his ex in 2000s granted absences from prison
A woman who pressured her boyfriend into killing his teenage ex more than a decade ago will be allowed to leave prison for weeks at a time.
Customers disappointed after email listing $60K Tim Hortons prize sent in error
Several Tim Horton’s customers are feeling great disappointment after being told by the company that an email stating they won a boat worth nearly $60,000 was sent in error.