TRREB’s April GTA Data.

Interest Rate Hike – Will It Crash The Toronto Real Estate Market?

Following the Bank of Canada’s interest rate hikes in March and April, the Toronto and the GTA real estate markets have begun to cooldown. This is a great news for the buyers who have been wary of entering the ultra-competitive market for the past 2 years.

Home prices are becoming more affordable and the Home Price Index (HPI) Benchmark has come down from the March level with an average selling price of $1,254,436 in April, from $1,300,082 in March. Those buyers who have locked themselves into a pre-approved mortgage rate should be especially fond of the current market conditions.

The majority of homes sold were townhouses and detached, with an average price of $997,416 and $1,526,791 respectively.

Will The Interest Rate Hikes Send The Prices To The Bottom?

While the interest rate hike is a necessary measure to cool off the over-heated real estate market in Toronto and the GTA, they are issued incrementally for a reason. If overdone, this could potentially destabilize the real estate market and even the entire economy as whole.

Hence the government usually opts for increasing the borrowing rates incrementally to avoid collapse and the risk of foreclosures. Also, let’s not forget that the interest rates were record low for the past 2 years and what is happening at the moment is interest rates are being brought up to their normal levels.

With that being said, the demand still persists in the province as more people resuming to work from their offices, the immigration is getting back on track and the economy is opening up again.

“It is anticipated that there will be enough competition between buyers to support continued price growth relative to 2021, but the annual pace of growth will moderate in the coming months,” said TRREB Chief Market Analyst, Jason Mercer. This signals a more balanced market and the time for motivated buyers to make their move.

The Most Affordable Cities In The GTA Right Now

BROCK:

Average price: $857,224 ($200,000 less than the GTA average)

ESSA:

Average price: $918,126 ($170,000 less than the GTA average)

OSHAWA:

Average price: $936,561 ($150,000 less than the GTA average)

ORANGEVILLE:

Average price: $938,711 ($150,000 less than the GTA average)

INTERESTED IN MAKING A MOVE IN THIS MARKET, BUT NOT SURE HOW TO START? BOOK A FREE CONSULTATION NOW: