Ontario housing market stuck at pre-pandemic prices, recession on the horizon for 2023: Desjardins
Published October 6, 2022 at 9:33 am
As rising interest rates weigh on housing affordability, a new report suggests Ontario and the Greater Toronto Area could be locked in to post-pandemic prices for the next few years.
A report by Desjardins on Canada’s residential real estate outlook says housing affordability in cities like Edmonton, Calgary and Winnipeg will see the largest improvements in affordability by late 2024, while Ontario is forecasted to return to the same level it was at in early 2021.
“In cities that saw the greatest erosion of affordability … we think it’s unlikely that they’ll get back to those pre-pandemic levels over the next couple of years,” said Randall Bartlett, Desjardins’ senior director of Canadian economics.
Desjardins is also forecasting the Canadian economy will enter a recession early next year, and the report warned governments will need to “mitigate the impact of the economic slowdown on homebuilding activity.”
According to the Toronto Real Estate Board (TREB), the overall composite benchmark price for all home types in Mississauga was $1,089,700 in September 2022, a small reduction of 3.6 per cent compared to September 2021.
And in Brampton, apartment prices spiked last month for a nearly 20 pre cent year-over-year increase as home sales across the GTA plummeted.
The Bank of Canada’s interest rate hikes have taken a toll on the housing market, slowing the pace of home sales and sending prices tumbling.
Since March, the central bank has raised its key interest rate from 0.25 to 3.25 per cent, leading to higher borrowing costs for Canadians.
The report said greater affordability will lead to a housing market rebound starting in 2024.
With files from The Canadian Pressinsauga's Editorial Standards and Policies advertising