The toll that rising interest rates are taking across Canada’s housing markets became even more apparent this past week as reports from local real estate boards revealed the downturn was deepening from coast to coast.
“Prices are sliding fast, and the exuberance that permeated these markets earlier this year is being replaced by fear,” wrote RBC assistant chief economist Robert Hogue in a recent note.
“In the Toronto and Vancouver areas, the decline in activity is quickly becoming one of the deepest of the past half a century.”
Apart from the dive housing took in the early COVID-19 lockdown, home sales in Toronto have fallen to the slowest pace in 13 years, Hogue said.
Meanwhile, inventories are climbing quickly, up 58% from a year ago, and buyers are now managing to get “meaningful price concessions” from sellers, he said.
Since March the composite MLS Home Price Index has shed $178,000, or 13%, falling to $1.16 million. In July alone prices declined 3.9% or $47,000.
Toronto is not a buyer’s market yet, according to the sales to new listings ratio, but RBC expects home hunters in the GTA to continue to find better deals, especially in the 905 areas outside of the core where prices soared during the pandemic.
Vancouver, where home sales are down 40% over the past four months, is also experiencing a big chill. July saw an estimated 9% decline.