A multi-month slide in Toronto home prices slowed in October, as sellers stepped back in hope the market will improve if they wait.
The benchmark price for a home in Canada’s largest city fell 1.1% in October to C$1.1 million ($802,217) according to data released Thursday by the Toronto Regional Real Estate Board. That’s the smallest decline in the seven straight months of price drops, bringing total losses to 17.7% on a non-seasonally adjusted basis, the data show.
Some homeowners appear to be delaying putting their homes on the market as a result. New listings in Toronto fell 11.6% in October from last year, reaching a level for that month not seen in 12 years, according to real estate board data. But the number of sales was still down much more, 49.1%, in the same period.
House prices began to fall in Toronto, and across the country, when the Bank of Canada started raising its benchmark interest rate. It’s gone from 0.25% in March to 3.75% today in one of the most aggressive campaigns to hike borrowing costs in the institution’s history. But with the threat of a recession rising, the central bank slowed the pace at its October meeting, delivering a 50- basis-point hike rather than the 75 basis points it did at the meeting before.
That has prompted speculation that Canada’s central bank may be nearing the end of a rate cycle that has put such pressure on the economy, and the housing market.
“Home prices in the GTA have found support in recent months,” Jason Mercer, the Toronto real estate board’s chief market analyst, said in a press release, referring to the Greater Toronto Area. “The Bank of Canada’s most recent messaging suggests that they are reaching the end of their tightening cycle.”
The Bank of Canada also warned that the economy could be in danger of two straight quarters of economic contraction. That situation, a technical recession, could itself exact a further toll on the housing market.
Real estate activity is also well below normal in Vancouver. Sales in British Columbia’s largest city were down 45.5% in October from the year before, and about a third lower than the 10-year average for the month, according to data from the city’s real estate board. Vancouver and Toronto are the country’s most expensive major housing markets.
Source: Canadian Mortgage Professional