Home sales in Toronto and Vancouver fell in June from last year’s highs and home prices fell further as higher borrowing costs made it harder for would-be buyers to enter the country’s two priciest real estate markets. In the Toronto area, home resales were down 41 per cent from June of last year and were down 4.7 per cent from May on a seasonally adjusted basis, according to the Toronto Regional Real Estate Board (TRREB). In the Vancouver area, resales fell 35 per cent year over year and were 16 per cent lower than in May, according to the Real Estate Board of Greater Vancouver. The home price index, which adjusts for price volatility, fell in both regions. In the Toronto area, the index fell 4.5% to $1,204,900 from May to June, the third straight month of decline, with the biggest losses in the city’s suburbs. Since the peak in March, the typical home price across the region is down 9.7%, according to TRREB data. In Halton, an affluent suburb to the west of the city, the house price index is down 16 percent from its peak in February. In Ontario, property buyers are pushing for lower prices Buying activity is slowing in the Toronto area real estate market “Buyers can afford to wait for a better deal,” said Felicia Jones, a realtor with The Jones Group, who has sold homes in the Toronto area for nearly a decade. “But then we have sellers on the other side who haven’t changed their minds much. Today’s value is not yesterday’s or the peak price three months ago,” he said. The price of a home loan has doubled in the past year and is expected to get more expensive when the Bank of Canada raises interest rates again to help contain inflation. The jump in the benchmark interest rate from 0.25 percent to 1.50 percent over the past four months has slowed real estate activity across the country. Brokers said their clients either can’t afford today’s mortgage rates or, if they can afford the higher borrowing costs, expect house prices to fall further. At the same time, sellers are refusing to accept lower prices after seeing nearby homes hit record prices in the early months of this year. Toronto suburbs and less populated cities across Ontario had seen some of the sharpest price gains when interest rates were near zero. These areas are now seeing some of the biggest declines. Although fewer homeowners listed their properties for sale in June compared to the previous month, homes are taking longer to sell. In Toronto, the number of new listings remained flat month over month. In Vancouver, new listings fell. TRREB said it expects current market conditions to remain in place during the slower summer months. Its president, Kevin Crigger, expects some buyers to return to the market once house prices stop falling. In the Vancouver area, the home price index fell 2 per cent to $1,235,900 from May to June and is down 2.2 per cent over the past three months, according to the Vancouver board. Semi-detached houses shouldered the biggest price drop. The typical price of a single-family home in the Vancouver area fell 1.7 per cent to $2,058,600 from May to June. Semi-detached homes fell 2.2 percent to $1,115,600 over the same period and condos fell 1.7 percent to $766,300. “Rising interest rates and inflation concerns are making buyers more cautious in today’s housing market, which is allowing for a build-up in purchases,” Vancouver board president Daniel John said in a news release, adding that falling prices of homes was the result of a fall in home buying activity, not an increase in supply. Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox morning or night. Sign up today.
