Toronto home prices fell the least this year in November as fewer people put their homes up for sale, slowing a correction that began when interest rates started to march higher.
The benchmark home price in Canada’s largest city slipped 0.8 per cent to $1.09 million, the smallest monthly drop since prices began falling in April, according to data released Tuesday by the Toronto Regional Real Estate Board.
Activity is slow: Just 4,544 homes were sold during the month, down 49 per cent from a year ago. Fewer than 8,900 homes were brought to market in November, down from October and from the year before.
The real estate board said the numbers provide evidence the correction is slowing down. “The marked downward price trend experienced in the spring has come to an end,” Jason Mercer, its chief market analyst, said in a statement.
Home values in Toronto and other richly priced Canadian cities have experienced a steep drop this year as the central bank rapidly raised interest rates to combat inflation. But with the economy now starting to show signs of stalling, the Bank of Canada has signaled its rate-hiking campaign could be nearing an end.
That may be prompting more prospective home sellers to delay listing their properties in hopes of a market rebound — though the slowdown in listings and sales also follows a seasonal trend in Canada’s winter months. Buyers, too, may be skittish, given the pace of rate increases.
“We’ve seen the greatest impact from the higher borrowing costs play out,” Mercer said in an interview on BNN Bloomberg Television. “Looking forward, it’s very possible to start to see some of these home buyers who moved to the sidelines come back into the marketplace.”
While traders are still expecting the Bank of Canada to raise its benchmark rate at its last meeting of the year on Wednesday, bets have settled on a quarter-percentage point increase. The central bank has delivered five straight rate hikes of at least 50 basis points.
Toronto’s benchmark home price is now down 18.4 per cent since it peaked earlier this year at around $1.34 million, on a non-seasonally adjusted basis.