Toronto Home Prices Fall Most in 15 Months as Rates Sting Buyers
The Toronto housing market has seen a sharp decline in home prices over the past 15 months, as rising interest rates have made it more difficult for buyers to afford homes. The average price of a home in the city fell by 8.3% in October, the largest drop since August 2018.
Rising Interest Rates
The decline in home prices is largely due to rising interest rates, which have made it more difficult for buyers to afford homes. The Bank of Canada has raised its benchmark rate three times since July 2018, and the rate is now at 1.75%. This has caused mortgage rates to rise, making it more expensive for buyers to take out a loan.
Decline in Sales
The rising interest rates have also caused a decline in sales. In October, the number of homes sold in the city fell by 8.7%, the largest drop since April 2018. The decline in sales has been particularly pronounced in the luxury market, where sales have fallen by more than 20%.
Decline in New Listings
The decline in home prices is also due to a decrease in new listings. In October, the number of new listings fell by 8.2%, the largest drop since April 2018. This has caused a shortage of homes on the market, which has driven up prices.
Impact on Buyers
The decline in home prices has had a significant impact on buyers. Many buyers are now unable to afford homes, as the rising interest rates have made it more expensive to take out a loan. This has caused some buyers to delay their purchase, while others have been forced to look for cheaper alternatives.
Impact on Sellers
The decline in home prices has also had an impact on sellers. Many sellers are now unable to get the price they were hoping for, as buyers are unable to afford the higher prices. This has caused some sellers to reduce their asking price in order to attract buyers.
Outlook
The outlook for the Toronto housing market is uncertain. The rising interest rates have made it more difficult for buyers to afford homes, and the decline in new listings has caused a shortage of homes on the market. This has caused prices to fall, and it is unclear how long this trend will continue.
It is likely that the Toronto housing market will continue to experience volatility in the coming months. The Bank of Canada is expected to raise interest rates again in the near future, which could cause prices to fall further. It is also possible that the shortage of homes on the market could cause prices to rise, as buyers compete for a limited number of homes.
Overall, the Toronto housing market is facing a period of uncertainty. The rising interest rates have made it more difficult for buyers to afford homes, and the decline in new listings has caused a shortage of homes on the market. This has caused prices to fall, and it is unclear how long this trend will continue.