Thinking of buying or selling your home this autumn? While 2022 has been a year of change for the real estate market in Canada, there are a few trends to look out for during the season of colour. Here’s what we expect from the fall real estate market.
Interest rates will likely keep rising
If you’ve been following the Bank of Canada’s interest rate hikes closely this year, you’ll know that another increase is coming. The rate was a historically low 0.25% in March of 2022, but with hikes over the past six months, the interest rate now sits at 3.25%. It’s expected to go up another half a point in October as the Bank of Canada has stated that it will continue quantitative tightening.
Inventory could keep diminishing
As a response to rising interest rates, which means smaller housing budgets for buyers, we’ve seen the number of homes for sale drop over the spring and summer months as sellers are holding out until the market changes. According to the Toronto Regional Real Estate Board, home sales were down 47% in July from the previous year, and new listings slowed as well. This trend is expected to continue into the fall. The lack of inventory could help to buoy prices somewhat.
Better buyer opportunities for fall…
It’s important to note that while home prices are dropping from their peak, the average selling price is still higher than pre-pandemic and was actually 1.2% higher year over year in July.
The price of homes in Toronto fell for a fifth straight month in August, and experts believe they’ll continue to decline if interest rates rise. This means that buyers have more leverage in the current market, and there are more instances of price reductions and more flexible offers than earlier in the year when we were clearly seeing a seller’s market. A combination of lower prices and higher interest rates is actually balancing the market and creating some excellent opportunities for buyers for a change.
Demand could increase
We know that the East End of Toronto is a Blue Chip neighbourhood and we expect even in a changing market we will see relative stability in the East. The combination of rising interest rates for buyers and softening home prices for sellers has created a bit of a standoff situation, resulting in many people holding off from buying or selling—especially over the summer. However, a decline in home prices could start to attract an influx of interested buyers come fall, and with a continued decline in inventory, demand could actually increase once again. Only time will tell.
Wondering if it’s the right time for you to sell your home or buy a new one? Contact our expert team today to discuss.
Buying, Selling, or Have Questions?
We can help. Connect with our East End experts today!
