Canada’s housing market is plunging as higher interest rates scare off potential buyers. Even so, the effects of the slowdown are not showing up in the country’s red-hot inflation.
👀 housing market starting to 🆒, new figures show
Dated: April 29 2022
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 it's 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.
Robert started in Real Estate over 20 years ago as a Real Estate Investor, building a portfolio of real estate. His passion for real estate and his experience as a licensed mortgage agent has helped h....
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