By Fergal Smith
TORONTO (Reuters) – Greater Toronto Area home prices fell in November as higher borrowing costs crimped affordability, while the level of sales edged higher for the first time in six months, Toronto Regional Real Estate Board (TRREB) data showed on Tuesday.
The seasonally adjusted average home price fell 2.2% in November from October to C$1,104,062 ($815,769), marking the fourth decline in the last five months.
On a year-over-year basis, the average price was up 0.3% but it was down 18.9% from the February 2022 peak.
“Inflation and elevated borrowing costs have taken their toll on affordability. This has been no more apparent than in the interest rate-sensitive housing market,” TRREB President Paul Baron said in a statement.
“However, it does appear relief is on the horizon. Bond yields, which underpin fixed rate mortgages have been trending lower and an increasing number of forecasters are anticipating Bank of Canada rate cuts in the first half of 2024.”
Money markets are betting that the Canadian central bank will leave its benchmark interest rate on hold at a 22-year high of 5% at a policy announcement on Wednesday and then shift to cutting rates as soon as March.
Seasonally adjusted sales rose 1.7% in November from October to 4,932 homes, marking the first increase since May. Still, sales were down 6% compared to November last year.
New listings climbed 16.5% year-over-year but decelerating from the 38% pace of increase posted in October.
($1 = 1.3534 Canadian dollars)
(Reporting by Fergal Smith; Editing by Stephen Coates)
