Greater Toronto Area (GTA) Sees Dramatic Drops in Housing Market

Interest rates and higher borrowing costs have continued to affect the Greater Toronto Area (GTA), and the property market’s movements in September 2022 reflected that. House sales decreased by 44.1% compared to September 2021, with just 5,038 transactions during the month. 

They weren’t the only metric to drop. There were only 11,237 new listings, which was a 16.7% drop relative to 2021, making 2022 the September with the fewest listings since 2002 — and a dramatic departure from the general upward trend of the area over the last two decades.

However, the average price did increase compared to the previous month, and currently stands at $1,086,762.

Over the year, the MLS® Home Price Index (HPI) Composite benchmark increased by 4.3%, while the average price decreased 4.3%.

October is usually the fall month with the strongest demand, so the market performance over this period will provide crucial clues for what to expect from the rest of the year.

There could be a deeper problem related to the drop in the housing market: The possibility that it distracts from the housing shortage in Greater Toronto.

Just because the affordability crisis is spooking potential house buyers temporarily, it doesn’t change the fact that a lack of adequate housing problems is a serious issue. As the Ontario municipal elections approach, the provision of more housing options should be a key issue for candidates. 

The council will have a big role in influencing development approval processes, development fees, housing affordability, and other issues. Whoever wins the election should also consider how to make it easier for people to sell their existing homes, such as reconsidering land transfer taxes and other significant costs that act as entry barriers.

New policies being discussed could also have a negative impact, such as compulsory home energy audits — which would mean it takes longer to sell a house and could reduce the number of home listings further.

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