June 2022 – Toronto shows a 41% home sales drop as higher interest rates push buyers out of the market
Last month, the Greater Toronto Area real estate market felt one more hit as more buyers decided to wait and see what happens next amid growing borrowing rates.
According to the Toronto Regional Real Estate Board (TRREB), home sales were down by 41.4% on a year-over-year basis, with 6,474 properties sold.
Housing sales fell by 11.1% from May or by 4.7% on a seasonally-adjusted basis.
All types of real estate in the GTA showed double-digit sales drops: from 30.8% in case of detached houses in the City of Toronto to 44.4% in the sector of townhouses in the 905 region, including Mississauga and Brampton.
“Home sales have been affected by both the affordability issues, caused by mortgage rate increases, and the psychological effect that forces even home buyers who can afford higher borrowing costs to postpone the purchase and see where home prices will end up,” – noted said Kevin Crigger, TRREB’s president.
“Today’s market conditions are expected to remain during the slower summer months. As soon as home prices stabilize, certain buyers will come back to the market despite higher borrowing costs.”
Next week, we can see another increase in the cost of borrowing, as the Bank of Canada will announce its new interest rate decision. Economists believe the BoC will follow the U.S. Federal Reserve example and raise its key lending rate by 0.75% to 2.25%.
As more homebuyers left the market last month, sellers also decided to wait, with the number of new listings going up by only 1% annually.
Real estate prices kept falling on a monthly basis: the average price was down by 5.5% to $1,146,254, marking the fourth monthly drop in a row.
TRREB MLS System Sales and Average Price by Home Type June 1-30, 2022
| Sales | Average Price | |||||
| 416 | 905 | Total | 416 | 905 | Total | |
| Detached Houses | 747 | 2,265 | 3,012 | 1,737,012 | 1,361,862 | 1,454,902 |
| Yr./Yr. % | -30.8% | -44.3% | -41.4% | 2.4% | 2.4% | 3.5% |
| Semi-Detached Houses | 245 | 389 | 634 | 1,343,378 | 987,009 | 1,124,723 |
| Yr./Yr. % | -41.8% | -38.0% | -39.5% | 5.9% | 7.8% | 6.4% |
| Townhouses | 243 | 854 | 1,097 | 1,027 | 906,311 | 933,056 |
| Yr./Yr. % | -42.6% | -44.4% | -44.0% | 9.1% | 8.3% | 8.6% |
| Condo Appartment | 1,165 | 513 | 1,678 | 771,267 | 692,598 | 747,216 |
| Yr./Yr. % | -38.5% | -42.8% | -39.9% | 7.4% | 13.2% | 9.3% |