The number of homes sold in October in metro Toronto, Canada’s largest city, fell by 49.1 percent from a year earlier, with the number of homes for sale falling to a level last seen in 2020, the Toronto Regional Real Estate Board reported last week.
The average selling price of a house was $1,089,428, 5.7 percent less than a year ago.
Prices fell most among the highest-priced single-family homes. Prices for condominiums rose 1.8 percent, year on year.
Home prices have been edging down across Canada since the country’s central bank began raising its benchmark interest rate in March.
“Obviously, there is still a lot of economic uncertainty,” board president Kevin Crigger said in comments quoted by the Associated Press.
However, “with new listings at or near historic lows,” home prices will remain near current levels instead of declining notably further, he predicted.
TREND FORECAST: With the average selling price of a home in Canada already down more than 10 percent, we suggest the BoC rose rates only 50 basis points in late October to bring its benchmark policy
rate to 3.75 percent because of the critical recessionary pressures that lie ahead.
And totally absent from business analysis reported by the mainstream media is the fact that the national, regional, state and city politicians who imposed strict COVID War draconian mandates on the nation for over two years are 100 percent responsible for inflationary pressures and the now declining economy.
And considering that residential real estate comprised 20 percent of Canada’s GDP in 2021, should interest rates continue to increase even at 50 basis point rates, the economy will quickly descend into recession.
TRENDPOST: As in the U.S., there are now two housing markets in Canada.
High-income earners and cash-rich households will have their pick of houses for sale, while modest- and middle-income prospective buyers – most of the population—will continue to be shut out of home ownership.
Also, according to BetterDwelling.com, nearly a third of residential credit outstanding is variable rate, with roughly half (53 percent) originating in the past year… which means the higher interest rates rise, the more the borrower has to pay.
In the U.S., only about 10 percent of all mortgages are now adjustable rate mortgages (ARMs).