Toronto’s Housing Market is Easing Up With Cooling Prices

This is what buyers have been waiting for: a little cooling off of the housing market, and that’s what appears to be happening as of late in Toronto and surrounding areas.

But how far have prices fallen, and will they continue to drop? And how will mortgage rates affect

homebuyers?

Home Prices Dipping in the GTA

For years, it’s been a sizzling real estate market in the GTA. Buyers have seen home prices skyrocketing at a pace that appeared to be unsustainable. Homeowners have greatly benefitted from soaring market values, allowing them to realize incredible profits upon selling their homes.

But unless they did not need to buy another home, sellers still faced the same issues buyers had: inflated home prices.

That said, there seems to be a levelling off of home prices, primarily due to rising interest rates. As a the result, prospective buyers have to look for properties in lower price brackets, which is putting downward pressure on housing prices.

Tight Inventory is Still an Issue

The thing is, there is still an inventory issue. Simply put, there are still too many buyers and not enough homes. This supply and demand issue is not quite allowing home prices to drop significantly just yet. As long as inventory plays a key role, home prices won’t dip as far down as home buyers might like.

According to current Toronto MLS stats, the average price for a home is still hefty at a whopping $1,022,926. Despite this high price, that’s actually 1.5% lower than where prices were last month, and 16% down from last quarter. That said, prices are still up on a year-over-year basis by a modest 1.9%.

Interestingly, Toronto proper is not even in the top 10 most expensive markets in the GTA. In fact, Toronto lies at #17 in terms of housing prices, with King City taking the top spot with an average home price of $5.9 million.

Rounding off the top 5 is Oakville at $1.5 million, and Richmond Hill, Vaughan, and East Gwillimbury at $1.3 million each.

Could Home Prices Hit Rock Bottom This Year?

While home prices may be on the downturn, the real estate market in the city has yet to hit its bottom as the market continues to adapt to spiking interest rates.

RBC economists believe that future spikes in mortgage interest rates will be a hurdle for most homebuyer hopefuls, especially in Ontario and BC where housing affordability is the worst. This could potentially lead to a big market correction.

The conundrum for buyers is that despite lower home prices, higher interest rates are still making it difficult to secure financing to support a home purchase. As such, buyers should be teaming up with a mortgage specialist and real estate team to help them get into this precarious market.

Buyers Have More Options When Teamed Up With Seasoned Professionals

While mortgage rates might make things a bit tricky for buyers, partnering with a seasoned real estate team can help ensure you work with your finances by looking at pockets in the market that more closely match your financial comfort zone.

If you’re looking to buy a home in Toronto or the surrounding GTA in the near future, get in touch with the experts at the April Williams Group to make it happen!