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.
Worsening housing affordability, rising fixed and variable mortgage rates, and accelerating inflation following Russia's invasion of Ukraine is shifting sentiment. "This is the most dramatic increase in five-year fixed rates that I can remember, and I've been in this business for two decades," said David Larock, a mortgage agent at Integrated Mortgage Planners. "I'm starting to see purchase and sale agreements come in with financing conditions, which has been unheard of in the last couple of years," he said.
While that is unlikely to cause major damage to household finances, it will put pressure on marginal buyers, he said.