Toronto Real Estate Market Faces Declining Prices and Softening Demand Amidst Interest Rate Hikes

Image by: unsplash

The Greater Toronto Area's new home market is experiencing declining prices and a drop in sales, with buyers showing less interest in the real estate market. The Building Industry and Land Development Association (BILD) attributes part of the issue to the Bank of Canada's continued interest rate hikes. In June, 2,526 new homes were sold, a 32 percent increase compared to the previous year, but still 30 percent below the ten-year average for June sales. Condos, stacked townhomes, and lofts accounted for the majority of sales, with over 1,950 units sold, representing an 11 percent year-over-year increase but falling 21 percent below the ten-year average.

Single-family home sales saw a significant year-over-year increase of 256 percent in June, but it was still 49 percent below the ten-year average for that month. The surge in inventory, reaching almost 16,400 units, coupled with the decline in sales, has led to a "softening impact on prices." The benchmark price for new condo apartments dropped 8.4 percent year-over-year to $1,090,494, while the benchmark price for new single-family homes decreased by 6.9 percent to $1,716,467 during the same period. These trends suggest that the real estate market in the Greater Toronto Area is facing challenges due to the combination of interest rate hikes and a change in buyer behavior.

Read the full article on: blogTO