Toronto realtor Nasma Ali has noted a marked slowdown in housing demand in the red-hot Greater Toronto Area over the past few weeks, which she sees as a likely precursor to a reckoning in the suburbs and surrounding towns that have seen blistering price growth over the past two years.
The slowdown in major cities like Toronto and Vancouver and their surrounding areas appears to be gathering steam, driven by a confluence of factors. Money markets are betting the central bank will increase its policy rate to 2.25 per cent by year-end, up from a current 0.5 per cent. Marnie Bennett, owner of Bennett Property Shop Realty in Ottawa, said she has seen a shift in the market, particularly at the lower end, as affordability concerns dissuade first-time buyers, and investors cash out near the peak.
Pedro Antunes, chief economist at the Conference Board of Canada, expects a decline of about 10 per cent in home prices from peak to trough, driven by the end of pandemic income supports, rising interest rates and the return to more normal consumer spending patterns.
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