upped interest rates by 0.25 per cent<\/a>, the first increase since 2018. However, Hogue stated that this had little effect on cooling down the market, and may have rather fueled homebuyer demand as they moved up their purchasing decisions in order to secure a lower interest rate. The story will likely change with future rate hikes. RBC says that it expects the BoC to increase the policy rate by an additional 150 basis points by the end of the year.<\/p>\n\u201cActivity brought forward since the fall has exhausted some of the future demand, but more importantly materially higher borrowing costs will make it harder for buyers to enter the market,\u201d said Hogue.<\/p>\n
Higher prices, lower inventories push some buyers to the side<\/h3>\n
Spring activity got off to a quieter start in some local markets during March.<\/p>\n
In Toronto, home resales fell 30 per cent from March 2021, and off an estimated 16 per cent from February on a seasonally-adjusted basis. The composite MLS HPI jumped 2.7 per cent from February, which is a downward trend from the average 4.4 per cent increase recorded during the last five months. Although property prices will continue to climb, Hogue anticipates that the pace of growth will moderate, especially if affordability worsens.<\/p>\n
\u201cIn fact, we think a peak may soon form,\u201d said Hogue. \u201cClearly the $1.38 million price tag for a typical home is a stretch for a growing number of buyers.\u201d<\/p>\n
In Montreal, moderation trends continued to play out as resales dropped four per cent from February on a seasonally-adjusted basis, marking the fifth consecutive month of declines. Low inventories and rising ownership costs are likely the culprit behind the fading enthusiasm among buyers, which may also be reflected in the slower pace of median property price growth in recent months.<\/p>\n
Calgary, Vancouver markets report hotter March results<\/h3>\n
Contrary to Montreal and Toronto, some local markets had a roaring March.<\/p>\n
Home resales in Calgary were incredibly strong last month after reaching an all-time high in February. Even as new listings rose 24 per cent from March 2021, it wasn\u2019t enough to get pace with buyer demand, pushing home prices even higher as the composite MLS HPI grew four per cent monthly.<\/p>\n
\u201cWith the provincial economy now roaring, in-migration rapidly gathering steam and affordability comparing well relative to other major markets, we expect housing demand to stay solid in the period ahead,\u201d said Hogue. \u201cThis is poised to keep prices on a steep upward trajectory.\u201d<\/p>\n
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<\/a>Photo:\u00a0karamysh<\/a> \/ Adobe Stock<\/em><\/p>\n