How interest rates will drive Canada's housing market in coming months

financialpost.com:

Lower interest rates might be the only thing that could revive Canada’s housing market as supply outpaces demand in the country’s largest real estate markets, experts say.

For example, Toronto home sales plummeted as new listings surged in September. Sales were down 12 per cent from August and 7.1 per cent year over year, according to Toronto Regional Real Estate Board (TRREB) data. There were also 16,258 new listings, a 32 per cent increase from August and 44.1 per cent higher than a year ago.

Vancouver had a similar jump in inventory last month, with 5,446 new listings, a 28.4 per cent increase from September 2022, according to Real Estate Board of Greater Vancouver data. September sales totalled 1,926, which is a 13.2 per cent increase from the same month last year, but still below the 10-year seasonal average and a 16.1 per cent drop from August.

“Sales are really weak, technically up year over year, but that’s comparing to a horrible September of 2022,” Steve Saretsky, a realtor at Oakwyn Realty Ltd. in Vancouver, said in an interview with the Financial Post’s Larysa Harapyn.

Prices are up in both Vancouver and Toronto from the same time last year, but weak sales combined with high inventory are starting to put downward pressure on prices.

The average price in Toronto was up roughly three per cent month over month and year over year at about $1.1 million. The composite benchmark home price in Metro Vancouver was $1.2 million, a 4.4 per cent increase from the same month last year, but a 0.4 per cent decrease from August.

“Interest rates are going to be the main factor driving the trends in house prices” in the next 12 months, John Pasalis, president of Realosophy Realty Inc. Brokerage in Toronto, said in the same