In recent months, however, the housing market has started to slow in response to rising interest rates. Since March, the Bank of Canada has raised its key rate by 175 basis points – the equivalent of 1.75% – in a bid to contain inflation. “You see some households taking a step back because they need to reposition themselves in the market,” said Mr. Mercer. “Maybe they need to find a cheaper house, a different location, or time to save more down payments.”
mr. Powell added: “We’re sitting still – a lot has changed in the past month.”
The brokerage reported In May, 7,283 sales in the greater Toronto area, 39 percent less than in May 2021 and 9 percent less than a month earlier. The overall average sale price for all property types was 1.21 million Canadian dollars ($962,000), down about 7 percent from the previous two months.
The two trends suggest a more balanced market, which should provide “a little more bargaining power for people who are still active in the market,” Mr Mercer said.
Toronto’s major central neighborhoods, including Rosedale, Lawrence Park and Forest Hill, remain highly competitive because they have a chronic lack of available homes, said Cailey Heaps, the president and CEO of the Heaps Estrin team. According to the real estate council, a detached house in the city currently costs an average of just under 2 million Canadian ($1.59 million), while a condo costs about 800,000 Canadian ($635,000) on average.
In addition, the luxury market continues to perform “extremely well” overall, Ms Heaps said. “Buyers understand the scarcity of the product they are looking for.”
In Port Hope, the average sale price for the 38 homes sold in April and May was 909,000 Canadian ($723,000), up 28 percent from a year ago, according to Zolo, a real estate site.