June 17, 2024

GTA real estate markets hit hardest by interest rate hikes | News

Real estate sales and prices have plummeted across most of the Greater Toronto Area since interest rates started rising in the first quarter of 2022.

The Bank of Canada (BoC) began raising its benchmark interest rate — which commercial banks use to set mortgage rates — in March 2022. Since then, the BoC has raised its overnight lending rate from 0.25 per cent to five per cent.

The average price for all dwelling types combined across the GTA peaked at $1,334,544 in February 2022. Since then, that combined average has fallen 15.6 per cent, coming in at $1,125,928 in October. 

All cities and towns monitored by the Toronto Regional Real Estate Board (TRREB) have seen price declines since the peak. However, the declines have been more pronounced in some markets than others.

Table showing how much detached home prices have fallen since GTA housing prices peaked in February 2022 in all markets monitored by TRREB.

The City of Toronto has seen the lowest declines over that period, but not uniformly across the city.

TRREB breaks Toronto down into three areas — East, West and Centre. Toronto Centre, which includes the downtown core, has only seen a 0.43 per cent decline, while Toronto East and West have seen their average real estate prices decline by 7.2 and 16.3 per cent, respectively.

The areas surrounding Toronto have similarly been something of a mixed bag, with average combined real estate price declines ranging from 9.7 per cent to a high of 41.4 per cent since the February 2022 market peak.

Outside of Toronto, Mississauga has seen the lowest price decline at 9.7 per cent, while King Township in York Region has experienced the largest drop at 41.4 per cent.

Three markets have seen average prices decline between 30 and 40 per cent, including Brock (38.5 per cent) and Scugog (35.9 per cent) in Durham Region, and Adjala-Tosorontio (34.5 per cent) in South Simcoe County.

Among the remaining 25 Toronto area cities and town monitored by TRREB, six have seen their average price for real estate fall between 10 to 20 per cent.

Those include Aurora (15.1 per cent), Markham (14.5 per cent) and Richmond Hill (12.3 per cent) in York Region, Halton Hills (17.8 per cent) in Halton Region, Clarington (16.4 per cent) and Uxbridge (12.6 per cent) in Durham Region, as well as Innisfil (17.5 per cent) in south Simcoe County.

The remaining 19 TRREB areas have all fallen between 20 and 30 per cent.

GTA real Estate sales have also plummeted over the past year, with last month seeing the lowest number of sales for the month of October dating back to 1996.

GTA October sales 1996 and 2023

Graph showing residential total real estate sales in Toronto and the GTA for the month of October between 1996 and 2023.

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