Toronto housing sales fall by 41% due to interest rate hikes
It looks like the influence of higher borrowing rates is making its way into Canada’s largest real estate market.
According to the recent report by the Toronto Regional Real Estate Board (TRREB), 8,008 homes were sold last month, which is far below the 13,613 sales seen a year earlier. It’s a 41.2% annual decline.
Compared to March, the activity was down by 27%.
“Based on the tendency we saw in the April housing market, we can definitely say the Bank of Canada is achieving its goal of slowing consumer spending while it tries to restrain inflation,” – noted Kevin Crigger, president of TRREB.
“Mortgage rates were up significantly during the previous four weeks, making certain Canadians postpone their purchase.”
Sales drops of 32-47% were reported in case of all property types.
TRREB says the slowdown was more vivid in the suburbs.
Although higher borrowing costs pushed some potential buyers out of the market, would-be sellers were also discouraged, as the number of new listings fell by 11.7% on a year-over-year basis in April.
The reduced activity led to a 3.5% monthly decrease in the average home price to $1,254,436.
On Tuesday, Bank of Canada Senior Deputy Governor Carolyn Rogers said housing prices need to go down.
“Real estate prices growth is unsustainably strong in Canada. It would be good for the economy if the growth in housing prices moderated slightly, and we expect that. It’s necessary,” – she added.
TRREB MLS System Sales and Average Prices April 1-30, 2022
|Sales||Average Price||New Listings||Sales||Average Price||New Listings|
|City of Toronto (“416”)||3,024||1,243,070||6,164||4,675||1,087,192||7,483|
|Rest of GTA (“905”)||4,984||1,261,332||12,249||8,938||1,092,098||13,358|
TRREB MLS System Sales and Average Price by Home Type April 1-30, 2022