Despite the continued housing market transition to a higher borrowing cost environment, the average selling price in the Greater Toronto Area found some support near $1.1 million since the late summer. GTA home sales continued to adjust to substantially higher interest rates in October 2022, both on an annual and monthly basis. However, new listings are also down year-over-year and month-over-month. The persistent lack of inventory helps explain why the downward trend in home prices experienced in the spring has flattened over the past three months.
Toronto Realtors reported 4,961 sales through the Toronto Regional Real Estate Board’s System in October 2022, a similar number to September 2022 but down by 49.1 per cent compared to October 2021. New listings were down by 11.6 per cent year-over-year and reached an October level not seen since 2010. New listings were down more so for mid-density and high-density home types, which helps to explain why prices have held up better in these categories compared to detached houses. With new listings at or near historic lows, a moderate uptick in demand from current levels would result in a noticeable tightening in the resale housing market. The average selling price for all home types combined is at $1,089,428, down by 5.7 per cent compared to October 2021. The monthly trends for both the MLS and the average selling price have flattened in recent months following steeper declines in the spring and early summer.
The Bank of Canada’s most recent messaging suggests that they are reaching the end of their tightening cycle. Bond yields dipped as a result, suggesting that fixed mortgage rates may trend lower moving forward, which would help affordability. The next interest rate announcement by the Bank of Canada is on December 7th 2022. Currently the Bank of Canada Policy rate is at 3.75%, Prime rate is at 5.95% and 5 year fixed rate mortgages range from 5.44%-5.89% with variable rate mortgages being around 5.05%.
Public policy initiatives like the recently introduced provincial More Homes Built Faster Act will help ensure we see more homes being built to affordably meet the needs of new households. Although these homes may take a long time to hit the market the government finally seems to be doing something about the real affordability problem and dealing with the low supply issue.
Although the news may seem gloomy there are still many buyers and investors in the marketplace who are looking to purchase properties. Many people choose to make a move because of lifestyle changes or circumstances in their lives that lead them to make a move. Whether it be buying a larger home to accommodate their growing family or downsizing as a result of not needing as much space and wanting to realize some of their real estate equity. If your lifestyle leads you to a place where you need to upsize or downsize there is no sense in delaying the inevitable. Just do the math to ensure it’s beneficial for you to make a move. You may find even though the news is gloomy in the marketplace their may be a benefit to act now. The real estate cycle always moves, although at a slower pace than the recent years the wheels are still turning.
In these times it’s crucial for you to have an experienced full time Realtor representing you. I would be glad to go through an analysis of your real estate goals in order to determine if its the right time for you to make an adjustment. With over 21 years experience I can ensure your real estate transistion goes smoothly. If you are planning a move or looking for an investment property feel welcome to call me to discuss your options. I would be glad to talk about your real estate goals.