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The real estate market has been calming down for a while now, and June 2022 saw a continuation of this trend. There were 6,474 sales in the Greater Toronto Area throughout the month, which represents a 41% decline compared to June 2021. Sales also decreased relative to May 2022, although this may be due to seasonal trends — house sales tend to slow over the summer.
Prices didn’t dip quite so drastically — the average selling price in June stood at $1,146,254, which is a 5.3% increase from the previous year. Plus, the MLS® Home Price Index Composite benchmark enjoyed a 17.9% rise over the same period. More affordable segments such as condominium apartments and townhouses helped to drive these increases. However, there was a slight dip between May and June this year when using the same measure.
Meanwhile, the number of listings has remained roughly the same. This combination of market trends is helping to stabilize the market and slow price growth.
Above all, it’s the spike in mortgage rates that have driven the drop in house transactions and prices.
Some homebuyers have been driven out of the market due to affordability challenges, and even those who can afford the higher prices may prefer to wait things out in case conditions change.
Psychologically, it’s difficult to accept the current market conditions knowing that their money would have stretched further a few months ago — and now, many are waiting for prices to drop to compensate for the higher interest rates.
As we reach the end of the summer, house prices are likely to stabilize, at which point it will be more appealing for buyers to enter the market again. And ultimately, the draws of the Greater Toronto Area will continue to attract buyers and keep the market strong over the long haul.
The future outlook will also depend on what happens to listings. Given that the market has slowed down, many would-be sellers may opt to hold out in the hope that listing their property later down the line could yield more fruit.
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