Yahoo Finance Toronto home prices are down 14% from a year ago, sales down 44%
Rising interest rates continued to hit the Greater Toronto Area real estate market in January as the composite benchmark price tumbled 14.2 per cent and home sales fell 44.6 per cent from the same month a year ago.
On a month-over-month basis, figures released by the Toronto Regional Real Estate Board on Feb. 3 show the GTAās composite benchmark price fell by 0.23 per cent to $1,078,900 from $1,081,400 a month earlier while the average price of homes sold dropped to $1,066,668 from $1,099,125. Property sales barely moved in January 2023 compared to December 2022 with 3,110 and 3,100 sales reported, respectively ā an increase of 0.32 per cent month over month.
New listings, meanwhile, were down 3.69 per cent to 7,688 from 7,983 in January 2022. The board noted that although the Bank of Canadaās overnight rate increased in January, longer term interest rates have declined, suggesting some relief may be in store when it comes to affordability.
āHome prices declined over the past year as homebuyers sought to mitigate the impact of substantially higher borrowing costs,ā TRREB chief market analyst Jason Mercer said in the report. āWhile short-term borrowing costs increased again in January, negotiated medium-term mortgage rates, like the five-year fixed rate, have actually started to trend lower compared to the end of last year. The expectation is that this trend will continue, further helping with affordability as we move through 2023.ā
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Along with changing borrowing trends, Mercer believes that interest rate hikes are likely on hold for the foreseeable future, something that could stoke demand.
āThe Bank of Canada has suggested that weāre going to see no further rate hikes as we move through 2023,ā Mercer said in an interview. āI think it may prompt some homebuyers who are kind of on the sidelines waiting to see which direction things are gonna go to start moving back into the marketplace, particularly in the second half of this year.ā
While Januaryās rate hike means that current variable rate holders will be coughing up more money each month, the BoCās decision to pause could mean mortgage rates have peaked, Mercer said.
āI think more importantly, when you think about the market over the medium to long term, it does signal that your rate hikes are going to be at least on pause or perhaps even done for this cycle,ā Mercer said. āYouāre actually starting to see your medium-term rates and five-year fixed mortgages start to trend lower and so I think from a homebuyerās perspective, it gives them a little bit more certainty about where borrowing costs are going to be.ā
TRREBās data shows that the largest year-over-year sales decline occurred in the condominium sector at 52.7 per cent from a year ago. At the same time, detached homes saw the largest average price decline ā dropping 23 per cent since January 2022.
None of the housing types recorded by TRREB saw gains in sales or average prices over the month of January 2023.
ā¢ Email: shcampbell@postmedia.com
