Toronto-area home sales plunge as higher interest rates cool market

Prices were still climbing on a yearly basis last month — up 15 per cent over April 2021, according to the Toronto Regional Real Estate Board on Wednesday.

The Bank of Canada hiked its overnight rate from 0.25 per cent to 0.5 per cent in March, then doubled it again to one per cent on April 13.

Between higher mortgage costs and the rising cost of everything from food to gas, homebuyers are pausing to evaluate just how much they can afford, says the real estate board.

Although condo prices slumped for much of 2021, the real estate board found those home prices continued to rebound in April, rising 14 per cent across the GTA.

The Toronto-area market remains tight enough to still experience annual growth, said Jason Mercer, the real estate board’s chief market analyst.

In a recent interview, Royal LePage CEO Phil Soper told the Star that when home sales slow, it’s typical for a gulf to open between buyer and seller expectations.

Even though sales have dropped, the GTA continues to suffer from a lack of housing, said real estate board CEO John DiMichele.

It found sales of new developments were 55 per cent above the same period last year and 60 per cent above the 10-year average.

New condos downtown continue to be the costliest and increased by 14 per cent to $1,637 per square foot, on average, in the first quarter.

Correction — May 4, 2022: According to the Toronto Regional Real Estate Board , house sales in April were down 41.2 per cent year over year, tumbling 27 per cent from March.

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