South forest hill residences.House prices in Toronto, Canada will fall next year. One reason is that rising borrowing costs continue to affect Toronto’s real estate market.Please Visit: South forest hill residences to Get Your VVIP Registration Today!
Toronto saw the smallest decline in house prices in November. Because fewer and fewer people are selling their homes, slowing the adjustment that began when interest rates began to rise.
Compared with November 2021, home prices in Toronto are now down by an average of 5.5%.
According to the latest data from the Toronto area Real Estate Board (TRREB), the average resale price for all types of properties was C $1079398 in November, compared with $1089428 in October.
However, TRREB points out that the decline is more pronounced in more expensive parts of the market, such as freestanding houses (11.3%) and semi-detached houses (13.9%).
The apartment market has proved more resilient, with resale values down by an average of just 0.9% compared with this time last year.
Although the increase in borrowing costs represents a short-term impact on the housing market, TREEB Chairman Kevin Crigger still expects a “strong rebound” in housing demand in the medium to long term, mainly due to increased immigration.
The long-term problem for policy makers will no longer be just inflation and borrowing costs, but to ensure that Canadians have enough housing to accommodate population growth.
The Bank of Canada has now raised its key lending rate six times in a row, from an all-time low to its highest level since 2008.
That, in turn, has put pressure on Toronto’s real estate market, with at least one big bank, RBC, saying it is now making a “historic adjustment”.
The RBC expects average house prices across Canada to fall by about 12 per cent from their February peak by early 2023.
The number of newly listed homes is 11.6% lower than in November 2021, providing some support for prices. Prices have been basically flat since the summer.
However, sales fell by an astonishing 49.4% from November 2021, with only 4544 homes sold.
After trading volumes also fell 49 per cent in October, TRREB said in its report that the market was continuing to be “affected by rising borrowing costs on affordability”.
Sales prices have fallen from their peak at the start of the year as market conditions become more balanced and buyers have sought to mitigate the impact of higher borrowing costs.
“nevertheless, the obvious downward trend in prices experienced in the spring is over,” said Jason Mercer, chief market analyst at TRREB.
The average price of all types of property in Toronto peaked at C $1334062 in February and plummeted to a recent low of C $1073242 in July.
The average selling price of a detached house fell to 1390162 yuan in November, while the average selling price of an apartment was 708636 yuan.
The average selling price of homes in the GTA area is expected to fall by another 11.8 per cent in 2023, according to a report released by Re/Max last week.