The housing market has reacted to rising borrowing costs. What a difference a couple of months makes! GTA market sales are down 38.8% year over year. Active listings are up 26% from last year and the market is trending more towards a balanced market with 2.11 MOI.
This is definitely a correction, but it’s not a crash. At the peak of the market in February, prices were up 28% year over year. In May, we’re only up 9.4% year over year. You can say prices have come down almost 19% since the peak. But we all knew that 28% growth was unsustainable. This is now more of a healthy market for everyone.
In the short term, we should see a trend towards a balanced market. It may take buyers and sellers some time to adjust to new market conditions.
On June 1st, the Bank of Canada increased the interest rates by another half a percent, or 50 basis points. There are further interest rate increases expected in the coming months as the government is still trying to get the 6.8% inflation under control.
In the medium term, there is still uncertainty with how much the interest rate will continue to rise which will keep some buyers on the sidelines.
My long-term outlook on the fundamentals of the market remains strong. Unemployment rate is trending low, immigration continues to increase and the projection for housing demand is lower than reality. We can see rental rates rising with the return to office.
The real estate market in the GTA has proven to be a safe and strong investment in the long term.
In particular, Mississauga’s average price has increased significantly over the long term. The average price has increased 49.9% in 5 years and over the last 10 years, prices have increased over 151%.
Each housing type and each neighbourhood have its own micro markets. If you’re interested in knowing how your property value has changed or want to know what opportunities for a good investment are out there, reach out and I would be happy to help.
647-504-0690
steven@mistersauga.ca
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