TORONTO — The moderation in the housing market in the Greater Toronto Area intensified last month, as the region’s real estate board found July sales fell 47% from the same time last year. and 24% compared to last June.
The Toronto Regional Real Estate Board revealed Thursday that last month’s 4,912 sales accounted for nearly half of the 9,339 homes that changed hands the previous July and indicate the market is slowing from the blistering pace seen in the first half and at the end of 2021.
The board and real estate agents attributed much of the moderation to the rising cost of a mortgage after Canada’s key interest rate was raised by one percentage point mid- July, making it the biggest increase the country has seen in 24 years.
The rise has encouraged people to rethink their housing intentions. Potential buyers are waiting for further lows, which they and brokers anticipate, could materialize in the fall, while sellers are planning to do what they can from home now or wait for the market to turn around again. their favor.
Some sellers are even canceling their listings to take advantage of the hot rental market, where vacancy rates are falling and prices are rising.
While January’s warm market saw 380 condo listings terminated in the GTA, real estate company Strata said June brought 2,822, an increase of 643%.
The moderation taking shape in sales is slow to appear in house prices.
TRREB found the average home price was $1,074,754 last month, up 1% from $1,061,724 in July 2021, but down 6% from $1,145,994 in June 2022.
The composite benchmark price was above $1.1 million, up 12.9% year-over-year.
Single-detached home prices fell 3% year-on-year to $1,362,598 last month, while their sales fell 46% to 2,203.
Semi-detached prices rose nearly 5% from last July to $1,077,750, while sales fell 45% to 474.
Townhouse prices jumped 6% to $903,899 as their sales fell 52% to 816, and condo prices jumped 7% to $719,273 and down 48% sales at 1,365.
The market also saw a decline in new listings, which stood at 12,046 last month, down 4% from a year ago.
The TRREB said the figures required government intervention, including boosting housing supply and revising mortgage policies.
Data firm Urbanation Inc. said Tuesday it expects nearly 10,000 GTA condo units to be delayed this year as rising mortgage rates weigh on home sales.
“Many GTA households intend to buy a home in the future, but there is currently uncertainty about where the market is heading,” TRREB CEO John DiMichele said in a statement. communicated.
“Policymakers could help dispel some of this uncertainty.”
He recommended that the government review the Office of the Superintendent of Financial Institutions stress test. The mandatory test sets the qualifying rate on uninsured mortgages at two percentage points above the contract rate or at 5.25%, whichever is greater.
Kevin Crigger, president of TRREB, echoed DiMichele’s plea, saying longer mortgage amortization periods of up to 40 years on renewals and transfers should be explored.
“With significant lending rate increases over a short period, there has been a shift in consumer sentiment, not market fundamentals,” he said in a statement.
“The federal government has a responsibility not only to maintain confidence in the financial system, but also to instill confidence in homeowners that they will be able to stay in their homes despite rising mortgage costs.”
This report from The Canadian Press was first published on August 4, 2022.
Tara Deschamps, The Canadian Press