The Greater Toronto Area's housing market has hit what experts are calling an "unprecedented slowdown" as October home sales collapsed by a staggering 95% compared to the same period last year. This dramatic decline signals a major shift in what was once Canada's hottest real estate market.
Market Metrics Paint Bleak Picture
According to the latest data from the Toronto Regional Real Estate Board (TRREB), the numbers reveal a market in rapid transformation:
- Sales volume dropped to just 4,961 transactions in October
- Average selling price fell to $1,089,428, down 5.7% year-over-year
- New listings also decreased significantly, down 11.6% from October 2021
- Seasonally adjusted monthly sales declined by 5.5% compared to September
Interest Rates Driving the Downturn
TRREB President Kevin Crigger points directly to aggressive Bank of Canada interest rate hikes as the primary catalyst for the market's dramatic reversal. "The impact of the Bank of Canada's rate tightening campaign is clearly visible in the housing market," Crigger stated, emphasizing that many potential buyers have been forced to the sidelines due to affordability challenges.
The benchmark interest rate has skyrocketed from 0.25% at the beginning of 2022 to 3.75% currently, with most economists predicting further increases in the coming months.
Price Corrections Across Property Types
The cooling trend isn't limited to sales volume alone. Price declines have become widespread across various property categories:
- Detached homes saw average prices fall 8.5% to approximately $1,365,000
- Semi-detached properties dropped 3.2% to about $1,035,000
- Townhouse prices decreased 1.5% to around $885,000
- Condominium apartments showed relative stability, down just 0.3%
Long-Term Outlook Remains Uncertain
TRREB Chief Market Analyst Jason Mercer suggests that while the current conditions are challenging, the fundamental demand for housing in the GTA hasn't disappeared. "The record population growth being experienced in the GTA, coupled with the scarce rental supply, will provide support for home prices moving forward," Mercer explained.
However, economists warn that the market may face continued pressure as the Bank of Canada maintains its inflation-fighting stance, with many predicting another rate hike in December that could further dampen buyer enthusiasm.
The dramatic October numbers represent one of the most significant monthly declines in Toronto's real estate history, marking a stark contrast to the frenzied bidding wars and record-breaking prices that characterized the market throughout much of the pandemic.
