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Home sales could decline by an average of a quarter this year: TD Report

According to a new report from TD, Canadian home sales could decline by an average of almost a quarter this year and remain low until 2023. .. The bank, produced by the

report, TD Economics, released Wednesday, "because monetary policy has tightened significantly more than expected," and has "house sales and price forecasts compared to March." "Significantly" downgraded.

TD Economics predicts that rising borrowing costs will "significantly impact housing activity" from 2022 to the first quarter of 2023, with peak-to-trough declines or business cycles. Reach the highest and lowest points of. 33 percent.

Housing activity should begin to "strengthen" beyond that, but remains low as interest rates fall.

This will reduce Canada's home sales in 2022 by an average of 23% annually, and then return to an average decrease of 11.9% in 2023.

Canada's average home prices should also fall in the first quarter of 2022 and 2023 due to chilling demand, with TD economics declining 19% from peak to trough and subsequent gradual growth. Is predicting.

This report was published after the Bank of Canada raised rates a series in record inflation.

Banks raised their major interest rateby 50 basis points, or 0.5 percentage points, to 1.5 percent in June.

Banks previously raised their major interest rates inMarchandApril, with the next interest rate announcement scheduled for July 13.

According to the TD Economics Report, key interest rates are expected to reach 3.25% by the fourth quarter of this year.

Bank of Canada Deputy Governor Paul Beaudry said last month that key interest rates could exceed the previous target of 3%. The

TD Economics report categorizes the compound annual growth rate and the state-specific home sales and price declinesin BC. Ontario is expected to see the largest decline in 2022 and 2023. This reflects "a significant deterioration in affordability during a pandemic," according to TD Economics.

A similar gradual rise in prices is seen in Quebec, where Alberta's sales are expected to "significantly decline from record highs" but are close to pre-pandemic levels until 2023 BC. It remains. And Ontario.

"Prices should hold up better elsewhere in Canada, and the most affordable conditions in the country ease other markets in Prairie's, Newfoundland and Labrador. "There is," the report said.

"Population growth and harsh conditions should bring short-term price support to the rest of the Atlantic, but activity in this region should cool as interest rates rise."

Canada's home pricesfell 15% in December 2023 to about $ 675,000, averaging just over $ 790,000 in February 2022, according to a report released last month by Desjardins. May drop from the peak of. ..

Nonetheless, Desjardins states that $ 675,000 is still close to 30% higher than December 2019, when Canada's average home price was $ 530,000.

Use CTV News and The Canadian Press files