It is looking rough out there for hopeful homebuyers in Toronto, as the city’s housing market is currently facing a major downturn.
Robert Hogue, of the Macroeconomic and Regional Analysis Group with RBC Economics, recently published a special housing report that delved into the downturn of some of Canada’s largest housing markets as a result of the Bank of Canada’s higher interest rates.
For Toronto, Hogue noted that the “decline in activity is quickly becoming one of the deepest of the past half a century.” Sheesh.
“Prices are sliding fast, and the exuberance that permeated [the Toronto market] earlier this year is being replaced by fear,” the report reads.
As per the report, the higher borrowing costs have created a roadblock for prospective homebuyers, and it is expected that the continued interest rate hikes “will keep chilling the market in the months ahead.”
So, what does this mean for Toronto’s housing market right now?
Well, Hogue notes that fewer people are buying right now and that the 6ix’s real estate market is seeing some of the slowest activity in over 13 years (excluding the April 2020 lockdown).
“The frenzy that took Toronto’s market to unprecedented heights this winter is completely gone,” the report reads.
Those who are looking for a home have likely noticed that there are more housing options to choose from, as inventories shot up by nearly 60% from a year ago. However, the higher interest rates are putting a dent in homebuyers purchasing budgets.
In July, the average house price dropped down by $178,000 since March. So, on average, houses are on the market for $1.16 million. This also includes an almost 4% (or $47,000) drop in house prices in July.
“We expect buyers to remain on the defensive in the months ahead as they deal with rising interest rates and poor affordability,” Hogue wrote.
From: NARCITY Toronto