The slowdown in the housing market continues with average sales and prices well below last year | CBC News

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New figures from the Canadian Real Estate Association confirm what buyers, sellers and homeowners have known for a long time: the housing market is depressed.

The group representing more than 155,000 real estate agents across the country said in a statement Friday that September sales were down more than 30 percent compared to the same period a year ago.

Prices also drop annually, with the median home sales price listed on the MLS system being $640,479. That’s down 6.6% from a year ago, and more than 21% down from the all-time high of $816,720 reached in February.

That was before the Bank of Canada began its aggressive campaign of rate hikes to curb runaway inflation. The central bank has raised its benchmark lending rate by more than three percentage points in the past six months, pushing rates on variable-rate loans above five and even six percent.

That has poured cold water on the once-hot housing market.

“The important thing to remember is that we are still in the midst of a period of rapid adjustment, with buyers and sellers trying to get along with each other, while many people have had to put their home-hunting plans back on the drawing board. . “CREA Chief Economist Shaun Cathcart said in a statement.

“As such, resale markets may remain quiet for some time, and the other side of the coin is even more pressure on rental markets.”

The rental market is hot

That’s the case in many markets across the country, including Brampton, Ontario, where realtor Shaun Ghulam said he’s noticed an interesting dichotomy: The property market has cooled, but the competition for rentals is red-hot.

“Lease prices are ridiculous now,” he said in an interview. “If it’s $3,000 a month, people are making $3,500.”

Earl Hypolite and Naomi Zitt-James rent an apartment in Toronto, but say they’re preparing to buy, most likely buying a fixer-upper somewhere outside the city center. (Dark Zdzienicki/CBC)

That uncertainty in the rental market is one reason Earl Hypolite and Naomi Zitt-James say they’re looking to buy a home of their own, sooner rather than later. The couple rents an apartment in downtown Toronto, but with a seven-month-old baby and a large dog, they feel it’s time to take the plunge.

“When it was just the two of us, I think it was really attractive,” Zitt-James said of the rental.

“But now having that kind of money … renting instead of paying for something we own, it’s a little less attractive than when we first moved in.”

While they have no imminent plans to purchase, they have been looking for properties outside of the city, where prices have dropped a lot.

“I feel much better now that I know prices have come down a little bit,” Zitt-James said. “I feel a little sad for those people who came in and got those houses only to have them fall down.”

Realtor Ghulam said sales prices have dropped considerably in Brampton since the spring. Sellers are still asking prices they could have gotten six months ago, and when they don’t get an offer, they delist their house and try again at a lower price, hoping to spark a bidding war that rarely happens.

“Check how many times the property has been listed,” Ghulam said. “If it’s been listed four or five times, you know the seller isn’t serious about selling and is just playing around.”

The result is a wide gap between the expectations of the seller and those of the buyers. “Sellers are resisting, they are waiting to see where interest rates go,” he said. “Buyers are a bit hesitant because they want to wait until prices come down further.”

TD Bank economist James Orlando says the figures make it clear that recent rate hikes have taken a lot of the momentum out of the market, scaring off buyers but also potential sellers.

“Listings fell for the third month in a row, indicating that a weakening economy and higher interest rates have yet to force a significant increase in supply,” he said of the figures. “If anything, soft pricing conditions keep potential sellers on the sidelines.”

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