Has Toronto's housing rebound already peaked? June figures, rate hikes are cause for concern
Has the Toronto real estate market’s rebound already run out of steam? That’s a question some homeowners might be asking after sales declined on a month-over-month basis in June while new listings jumped to the highest level in a year.
The 17 per cent decline in sales from a peak of 9,012 units in May ended a four-month streak of gains and coincided with the resumption of interest rate hikes from the Bank of Canada, which upped its benchmark rate by 25 basis points in June in a move that surprised many.
While the average and median prices of home sold declined modestly to $1,182,120 and $1,010,000 respectively, seasonally adjusted metrics from the Toronto Regional Real Estate Board showed prices holding steady on a month-over-month basis.
The average price experienced a 1.6 per cent increase, reaching $1,163,915, while the MLS HPI composite benchmark rose by 2.5 per cent to $1,163,200.
Now, with another interest rate decision looming on July 12, the market could be dealt another blow, one that could pressure prices.
In an email, John Pasalis, president and broker of record at Realosophy, a Toronto real estate brokerage, expressed the potential impact of further rate hikes on the market. Pasalis stated, “If additional hikes discourage more buyers, there is a chance we may witness some downward pressure on prices.”
If sales continue to slow, the upside for would-be homeowners is that the market could be shifting into “buyers’ market” territory, defined as housing supply exceeding demand. For some, that’s a nebulous concept.
“It’s hard to say specifically what metric makes something a buyers’ market. But generally, we’re still in a seller’s market,” Pasalis said in an interview. “There are still multiple offers. It’s just
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