by Nutan Brown
on Thursday, September 15th, 2022 at 2:56pm.
The Toronto housing market has seen massive changes over the last 2 years. Many people are wondering where the market is heading and what they can expect moving forward. Here are the answers to some of the top questions about the current housing market.
What Is Affecting Housing Prices?
There are many factors that affect housing prices. But one of the main factors is the lending rate, which can make mortgages more expensive for buyers and impact homebuyers’ purchasing power. Higher mortgage rates are dragging prices lower. The pandemic has also caused unpredictable shifts in the affordability of homes over the last 2 years. Now that the market is starting to stabilize, sales and prices are trending downward causing some sellers to accept lower offers than anticipated.
Another main factor is the war in Ukraine, which has impacted inflation and interest rates. If the conflict continues to escalate, the hit to the economy could increase and put more pressure on the housing market.
Are We In A Housing Bubble?
As noted, the rapid pace of the market over the last 2 years has caused some to believe that we are in a housing bubble that is set to burst. But now that the market has slowed down, some forecasters are predicting that home prices will moderate further in 2023 and 2024. Low supply levels and high demand are working against the idea that the Canadian housing bubble will burst.
What Trends Should We Look Out For?
One trend to keep an eye on is the rise of interest rates. Now that the economy is beginning to recover from the impact of the pandemic, mortgage rates are expected to climb. Another trend is low supply in the Canadian housing market. Nearly 1.2 million people are expected to immigrate to Canada by 2024, and these people will need a home. Optimistically, the fall market should be more active, as the summer market was very slow due to lack of listings. Stay tuned for my September Toronto market update to see what happens!