Photo: James Bombales
After reaching record heights in the spring of 2017, prices have cooled considerably for the once red-hot GTA single family housing market.
How much? Well, in February prices were down 12.4 per cent year-over-year, falling from $876,363 to $767,818. The Toronto Real Estate Board credits the Ontario government’s foreign buyer tax, a new federal mortgage stress test and an interest rate hike for the slide.
But how far will prices fall before they begin to stabilize? According to CIBC senior economist Benjamin Tal, not too much farther.
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“What we’re seeing now is prices coming down from where they were in the spring of 2017,” he tells BuzzBuzzNews. “Prices will likely fall farther for the time being, but most of the decline has already happened.”
Tal says that while the single family home market hasn’t adjusted fully, the “vast majority” of changes have already occured.
“I think over the next few months we’ll see things stabilize,” he says. “Prices won’t go up dramatically, but they won’t continue to move downwards either.”
It’s a prediction echoed by TREB director of market analysis Jason Mercer, who predicted earlier this month that prices would begin to rise in the summer.
“As we move further into the spring and summer months, growth in sales and selling prices is expected to pick up relative to last year,” he writes, in a statement.
It’s worth noting as well that, although single family home prices are down year-over-year, they’re still 12 per cent higher than they were in February 2016, representing an increase well above the rate of inflation for the past two years.
Looking ahead to 2019, Tal says rising interest rates will likely keep the market relatively cool.
“2019 will be kind of tricky, with higher interest rates,” he says. “Still, I expect things will remain stable and prices should stay fairly balanced.