Home buyers have moved to the sidelines in Canada’s two largest markets, as the Bank of Canada’s massive rate hikes take hold amid the annual summer slowdown..Greater Toronto Area.The Toronto Regional Real Estate Board (TRREB) reports 4,912 sales in the GTA in July, down from 6,474 sales in June and down 47% on a year-over-year basis..A key number in downturns is new listings, which declined 4% year-over-year. .Expectations are the trend for new listings will continue to follow the trend for sales, moving through the second half of 2022 and into 2023, says TRREB president, Kevin Crigger..“Listings will be an important indicator to watch over the next few months. With the unemployment rate low, the majority of households aren’t in a position where they need to sell their home,” says Crigger. “If would-be sellers decide to take a wait-and-see attitude over the next few months, it’s possible that active listings could trend lower as well. This could cause market conditions to tighten somewhat, providing some support for home prices.” .Price growth moderated last month from rapid increases over the last two years, says Jason Mercer, TRREB’s chief market analyst..“The MLS home price index composite benchmark was up by 12.9% year-over-year while the average selling price was up by 1.2% from July 2021 to $1,074,754,” say Mercer. “Less expensive home types, including condo apartments, experienced stronger rates of price growth as more buyers turned to these segments to help mitigate the impact of higher borrowing costs.”.Mercer does not see a market crash in the GTA.."The population continues to grow and tight labour market conditions will drive this growth moving forward,” he says.."Policymakers must continue to take action to boost housing supply to account for long-term population growth. TRREB has put realistic solutions on the table to address the existing housing affordability challenges. With savings high and the unemployment rate still low, home buyers will eventually account for higher borrowing costs. When they do, we want to have an adequate pipeline of supply in place or market conditions will tighten up again.".TRREB is calling on all levels of government to reassess and clarify policies related to mortgage lending and housing development.."Many GTA households intend on purchasing a home in the future, but there is currently uncertainty about where the market is headed,” says TRREB CEO John DiMichele. “Policymakers could help allay some of this uncertainty. As higher borrowing costs impact housing markets, TRREB maintains that the OSFI mortgage stress test should be reviewed in the current environment." ."With significant increases to lending rates in a short period, there has been a shift in consumer sentiment, not market fundamentals. The federal government has a responsibility to not only maintain confidence in the financial system, but to instill confidence in homeowners that they will be able to stay in their homes despite rising mortgage costs.” .“Longer mortgage amortization periods of up to 40 years on renewals and switches should be explored." .Greater Vancouver Area.The GVA housing market has entered a new cycle, says Daniel John, chair of the Real Estate Board of Greater Vancouver.."Home buyers are exercising more caution in today’s market in response to rising interest rates and inflationary concerns,” says John. “This allowed the selection of homes for sale to increase and prices to edge down in the region over the last three months.".July’s home sales in the GVA were 1,887, a 43.3% decrease year-over-year and a 22.8% decrease from June..New listings reached 3,960 homes, a 24.7% decrease from June, taking active listings to 10,288, a 1.3% decrease compared from June..“After two years of market conditions that favoured sellers, buyers now have more selection to choose from and more time to make their decisions,” John said. “In today’s changing housing market, both home buyers and sellers should invest the time to understand what these changes mean for their personal circumstances.”.Prices declined from June in all market segments..The overall MLS home price index composite benchmark price in July was $1,207,400, a 10.3% increase year-over-year and a 2.3% decrease from June..The benchmark price for a single-family home was $2,000,600, a 2.8% decrease from June..The benchmark price of an apartment home was $755,000, down 1.5% month to month..The benchmark price of an attached home was $1,096,500, a 1.7% decrease from June.
