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Bank of Canada rate boosts cool property prices: report

The Canadian Real Estate Association says home sales fell for the fifth consecutive month between June and July but this month's drop was the smallest of the five. A new home is displayed for sale in a new housing development in Ottawa on Tuesday, July 14, 2020.
Canadian Real Estate Association Home Sales fell for five consecutive months from June to July, but this month's decline was the smallest of the five. A new home is for sale in a new housing complex in Ottawa on Tuesday, July 14, 2020. Photo by Sean Kilpatrick /The Canadian Press

GTA price gains cooled in the second quarter of 2022 due to a rise in the Bank of Canada's overnight rate, a report released by RE/MAX Canada on Thursday said.

The 2022 RE/MAX Hot Pocket Community Report compares Q1 and Q2 2022 market activity by unit sales and price, with 60 Toronto area We analyzed the real estate commission area.

In GTA, Central and West End held up well in terms of average price.

Durham, Peel, York, Hulton and Dufferin have lost some of their recent gains.

“Buyer sentiment has slumped virtually overnight as heightened geopolitical concerns and rapid inflation destabilize global markets, leaving the Bank of Canada with little choice but to raise interest rates. ,” said Christopher Alexander, President of RE/MAX Canada.

"These rapid and ferocious increases put downward pressure on housing sales and prices, improving affordability on the one hand but eroding it on the other."

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RE/MAX found GTA's Q2 value to be 10% to 15% below Q1 levels.

Durham levels were down 14.6%, York down 12.9%, Dufferin down 12% and Peel down 11.2%.

Only 15% of the GTA market saw average price increases in Q2 compared to a hot Q1.

These markets are located in central areas such as Dufferin Grove, Little Portugal, Trinity Bellwoods, Palmerston Little Italy and Kensington Chinatown.

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"Core is traditionally more resilient, with strong demand, a limited supply of Among the markets, the results are not unexpected given that they are underpinned by greater equity on the end,” says Alexander.

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It was clearly more pronounced in suburban areas and the perimeter of 416, most of which experienced strong upward momentum as buyers sought to leave the city at the height of the pandemic.”

Some Prices are easing, but "the sky is not falling," said Elton Ash, executive vice president of RE/MAX Canada.

“In fact, market conditions are relatively stable, so buyers should not expect big bargains.

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