May 4, 2023
Ontario's housing market faced a much-needed correction in early 2022. Since then, the market has been on a decline with home prices steadily dropping month over month. However, recent data suggests that the market may be shifting, with average home prices continuing to rise for a third month in a row. This trend, coupled with an uptick in buyer activity and multiple offers becoming increasingly common, has left many wondering whether the correction is over.
Although we can say with a reasonable level of confidence that the market may be on the other side of the bottom, there are still some concerns that need to be addressed. One of the biggest factors affecting the housing market is the current interest rate environment. According to a Storeys, "Cuts are unlikely until 2024, leading to a restrictive interest rate environment for the time being. Therefore, housing affordability, which has “sharply deteriorated” since 2021, won’t be eased quickly. Buyers, especially in the pricey markets of BC and Ontario, will continue to face 'steep challenges.'"
The end to the correction depends in large part on whether the Bank of Canada has finished raising interest rates for the moment. While there is no definitive answer to this question, it is important to note that the Bank of Canada has been steadily raising interest rates for the past year. This has had a significant impact on the housing market, as higher interest rates make it more expensive for people to borrow money and buy homes.
In conclusion, while there are some positive signs in Ontario's housing market, there are still concerns that need to be addressed before we can definitively say that the correction is over. The current interest rate environment is restrictive, and housing affordability is a significant concern. It is important to keep an eye on these factors and take a holistic view of the market when assessing its health. Only time will tell whether the correction is truly over. However, we remain optimistic! One thing is for sure: the market is at a way better place than it was a few months ago!
One of our industry professionals would be happy to answer any questions you may have about buying or selling in today's market. Click here to speak to a real estate agent.
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