Borrowing costs

Toronto home sales drop 41% as borrowing costs weigh

Summer is looking cool for real estate in Canada’s largest city, says TRREB

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TORONTO — Toronto home sales in June fell just over 41 per cent from the same month last year as rising borrowing costs weighed on the market, the Toronto Real Estate Board said Wednesday. the region.

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About 6,474 homes changed hands last month, up from 11,053 the previous June, the Toronto Regional Real Estate Board said. June sales were also down from May.

Although the council attributed some of the decline between May and June to seasonal trends, it said the year-on-year figure and sales suggest the current, cooler market conditions will persist.

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“Home sales have been hurt both by the affordability challenge presented by mortgage rate hikes and by the psychological effect that homebuyers who can afford higher borrowing costs have put on hold. their decision to see where home prices end up,” said Kevin Crigger, chairman of the board. said in a statement.

“Expect current market conditions to remain in place through the slower summer months.”

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Crigger’s prediction comes as several of the country’s biggest housing markets – Vancouver, Toronto and Calgary – have eased in recent months.

Estate agents and economists attribute the phenomenon to the growing interest and mortgage rates as well as inflation, which recently reached 7.7%, its highest level in nearly 40 years. The Bank of Canada has hinted that further hikes may be on the way.

These conditions mean less buying power for potential buyers, but the market is still moving in their favor as homes are for sale longer and often don’t spark the frantic bidding wars they would have had ages ago. month.

Although homes sold for less on average in June than those that changed hands in May, prices were still up from a year ago.

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The average home price in the area was $1,146,254 last month, an increase of about 5% from June 2021. The average for June was a drop of nearly 6% from May 2022.

The year-over-year price increases were observed across all housing categories and extended to areas surrounding Toronto.

Average prices in 416 — a nickname for the city of Toronto that excludes its suburbs — reached $1,737,012 for single-detached homes, $1,027,050 for townhouses and $771,267 for condos.

  1. Homes line a hill overlooking the Vancouver skyline.  Home prices here in June were down 2% from the month.

    Vancouver home sales plunge, prices fall as buyers grow cautious

  2. An aerial view of housing is shown in Calgary June 22, 2013.

    Calgary home sales slow as detached and semi-detached markets decline

  3. Mortgage rates in Canada have risen since the Bank of Canada launched its rate hike campaign in an effort to tackle decades-high inflation.

    Canadians can afford higher mortgage rates, broker says

In the suburban areas of the GTA, known as 905, the average price was higher at $1,361,862 for a single home, $906,311 for a townhouse and $692,598 for a condo.

As prices rose from June 2021, estate agents noticed that many had delayed putting their properties up for sale, preferring to wait for the market to recover.

The number of properties listed in June was virtually unchanged from a year ago, the council found.

New registrations rose 1% to 16,347 last month from June 2021. They also fell 12% from May 2022.

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