The Ontario housing market has been in the red for years, but that could change soon and some areas could be hit harder than others.
A new report from Canadian financial services co-operative Desjardins said the Canadian real estate market has reached “a turning point”.
Since the Bank of Canada began raising interest rates to combat inflation, house prices have been steadily falling. Desjardins says the average house price in Canada fell 2.6% month-on-month in March and 3.8% in April.
These declines are expected to continue, the report said, and will be most significantly experienced in Ontario, where house prices could fall as much as 18 per cent.
“We expect real estate market correction in Ontario to be driven by declining sales activity and prices in smaller centers outside major urban areas,” the report says.
“We believe prices will fall more in the communities that saw the largest price increases during the pandemic and therefore the most affordable erosion.”
As a result, several areas just hours away from Toronto will see prices drop, the report said.
Of those regions, Bancroft could see the biggest drop in prices, followed by Chatham Kent and Windsor-Essex, according to the report.
(Source: Desjardins)
Toronto real estate agent Desmond Brown told CTV News Toronto that he “always thought that the first communities to feel that prices were going down would be the peripheral communities around Toronto.”
“The sustainability of the prices we were seeing was completely unrealistic,” Brown said.
Therefore, he estimates that prices in these regions could soon fall to pre-pandemic levels.
TORONTO PRICES CAN STAY HIGH
While rural areas could soon see prices fall, Brown says he believes the Toronto market will be slower to cool.
“Toronto is much more likely to keep prices higher than peripheral communities,” he said. “This is because the city is the economic engine of the country [and] There is still a high demand for people to live in Toronto, although today we see more of a hybrid work model. “
The report lists Toronto as the top five regions that are expected to see price declines.
With files by Tom Yun