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Month: June 2022

June 16, 2022 editor Comments Off on Greater Toronto Area Real Estate Market JUNE 2022 Housing Market Reports

Greater Toronto Area Real Estate Market JUNE 2022

Higher borrowing costs continued to impact home sales in June 2022. Sales totalled 6,474 3 down by 41 per cent compared to last year9s strong result. The number of transactions was also down compared to May 2022, but this is often the case due to the seasonal nature of the market.

The average selling price, at $1,146,254, remained 5.3 per cent above the June 2021 level, but continued to trend lower on a monthly basis. The MLS® Home Price Index Composite benchmark was up by 17.9 per cent year-over-year, but also experienced a month-over-month dip compared to May. Annual price growth was driven more so by less expensive market segments, including townhouses and condominium apartments.

Home sales have been impacted by both the affordability challenge presented by mortgage rate hikes and the psychological effect wherein home buyers who can afford higher borrowing costs have put their decision on hold to see where home prices end up. Expect current market conditions to remain in place during the slower summer months. Once home prices stabilize, some buyers will re-enter the market despite higher borrowing costs,= said TRREB President Kevin Crigger. While the number of transactions was down year-over-year, the number of new listings was little changed over the same period. This has provided for more balance in the market, resulting in a more moderate annual pace of price growth.

Listings will be an important indicator to watch over the next few months. With the unemployment rate low, the majority of households aren9t in a position where they need to sell their home. If would-be sellers decide to take a wait-and-see attitude over the next few months, it9s possible that active listings could trend lower as well. This could cause market conditions to tighten somewhat, providing some support for home prices, said TRREB Chief Market Analyst Jason Mercer.

Our region continues to grow because we attract people and businesses from all around the world. All of these people will require a place to live, whether they choose to buy or rent. Despite the shorter-term impact of higher borrowing costs, housing demand will remain strong over the long-term, as long as we can produce homes within which people can live. Policy makers at all levels need to make this their key goal, said TRREB CEO John DiMichele.

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June 1, 2022 Gyanesh Paliwal Comments Off on Canadian Housing Industry boom finally dwindling For Buyers, More Info, News

Canadian Housing Industry boom finally dwindling

Is the Canadian Housing Industry boom finally dwindling?

The greatest boom in the Canadian real estate and housing industry is finally coming to a halt after two years

Economists fear that this slowdown can cause a fall of around 10-20% in home prices this year.

While the national economy is recovering post-pandemic, soaring interest rates have also made a major dent on the Canadian real estate market.

National home sales dropped by 12.6% on a month-over-month basis which records the lowest level of monthly activity since the summer of 2020.
Actual monthly activity came in 25.7% below the monthly record set in 2021.
The sales-to-new listings ratio has declined to 66.5%, its lowest since June 2020.

The pandemic rushed the housing industry to new heights. Both 2020 & 2021 broke all previous yearly records for real estate sales exceeding demand over available supply. Despite odds, the historically low-interest rates during the pandemic helped the market for this rapid shoot-up.

CREA’s (Canada Real Estate Association) April stats

While market experts predicted a correction from Covid-time market levels, it was somewhat uncertain when and how it would happen. As soon as the Bank of Canada shifted its policies in recent months, as precedent, the interest rates started to rise causing a decline in the housing market.

Canadian GDP numbers have also slowed down in the first quarter of 2022. However, economists are still confident that the national economy holds firm grounds. Another raise in interest rates of 50 basis points by the Bank of Canada came in on June 1. We recently saw an increase of half a percent in April. Another raise lead to a policy rate of 1.5%, a quarter-point below the pre-pandemic levels.

The higher borrowing costs are going to affect several markets. Home prices will also be affected as mortgage rates are rising based on these new economic policies.

According to Mr. Kavcic, Bank of Montreal senior economist, when we talk about housing correction, it is not whether it will happen, but it’s about where, how much, and how long. He says that the suburban markets in Ontario look the shakiest.

There has also been a sudden change in buyer sentiment in the last few weeks. Realtors are noticing zero offers on some homes even after spending weeks on the market, in contrast to a previous couple of years during the pandemic when homes lured dozens of bidders and sold for several thousands of dollars above the listed price.

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