Toronto home price fell 3% in June, 11% since February | TRREB
Toronto home sales plunge 41% amid glut
Ari Altstedter
Bloomberg
Toronto home prices dropped for a fourth straight month and sales tumbled as rising borrowing costs rapidly cool demand for properties in Canada’s financial capital.
The average price of a home in the city fell three per cent in June to $1.14 million on a seasonally-adjusted basis, bringing the total decline to more than 11 per cent since February, according to data released Wednesday by the Toronto Regional Real Estate Board.
Fewer than 6,500 homes were sold during the month, down nearly five per cent from the previous month — and 41 per cent lower than a year ago. The number of homes listed for sale has soared.
This abrupt slide in Toronto’s housing market has coincided with the Bank of Canada embarking on one of the most aggressive efforts to raise borrowing costs in the institution’s history. To get inflation under control, governor Tiff Macklem has raised the benchmark rate from 0.25 per cent to 1.5 per cent since March, and traders are betting the central bank will lift it to 2.25 per cent next week.
“Home sales have been impacted by both the affordability challenge presented by mortgage-rate hikes and the psychological effect wherein home buyers who can afford higher borrowing costs have put their decision on hold to see where home prices end up,” Kevin Crigger, the Toronto real estate board president, said in a statement accompanying the data. “Expect current market conditions to remain in place during the slower summer months.”
“Home sales have been impacted by both the affordability challenge presented by mortgage-rate hikes and the psychological effect wherein home buyers who can afford higher borrowing costs have put their decision on hold to see where home prices end up,” Kevin Crigger, the Toronto real estate board president, said in a statement accompanying the data. “Expect current market conditions to remain in place during the slower summer months.”
With buyers fleeing the market while new listings continue apace, properties are starting to pile up.
The number of homes for sale in Toronto soared 43 per cent in June from the same month last year, to more than 16,000, while properties are now staying on the market an average of seven days longer, the report shows.
As the epicentre of a national housing boom that saw benchmark prices rise more than 50 per cent in two years, Toronto and its surrounding communities have now found themselves leading on the way down, too.
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