The average price for real estate in Mississauga fell to its lowest mark in two years last month as increased borrowing costs continued to drive prices down.
The latest monthly GTA real estate market statistics from the Toronto Real Estate Board (TRREB) showed an average sale price for all dwelling types combined of $920,587 in January. The last time Mississauga’s overall average was lower than that was in January 2021 at $890,020.
Real estate prices nearly doubled in four years, climbing from a combined average of $644,834 in February 2018 to a peak of $1,225,339 for all dwelling types combined in February 2022.
Since then, the market has gone into a steep decline, losing 24.9 per cent in value in just the past 11 months.
Detached and semi-detached homes have seen the sharpest declines
The average price for detached homes peaked out at an average price of $1,964,077 in January 2022. Last month’s average of $1,379,588 represented a 29.7 per cent year-over-year drop. The last time the average price for detached homes in Mississauga was below $1.4 million was in November 2021 at a monthly average of $1,318,779.
The average price for semi-detached homes peaked in February 2022 at $1,314,703 and has fallen by $398,759 — or 30.3 per cent — to an average of $915,944 last month.
Townhouse-style condominiums also peaked in February 2022 at $1,012,860 and have since fallen by 21.2 per cent to a January average $797,702. Likewise, apartment condos fell from a February 2022 peak of $736,006 to $626,401 last month, marking a 14.9 per cent drop.
While those price declines have led to the lowest combined average real estate price seen in Mississauga for two years, it hasn’t translated to an increase in sales — quite the opposite.
Real estate sales in Mississauga last month were by far the lowest January total since TRREB started sharing records in 1996 at just 262 total transactions. The lowest January sales total prior to last month came in 2009 with 311.
TRREB has attributed the drop in sales and prices to the Bank of Canada (BoC) raising its benchmark interest rate from 0.25 per cent to 4.5 per cent since March of last year.
“Home prices declined over the past year as homebuyers sought to mitigate the impact of substantially higher borrowing costs,” said TRREB chief market analyst Jason Mercer in the organization’s monthly analysis.
“Home sales and selling prices appear to have found some support in recent months. This coupled with the Bank of Canada announcement that interest rate hikes are likely on hold for the foreseeable future will prompt some buyers to move off the sidelines in the coming months,” added TRREB president Paul Baron.
However, in the wake of the BoC’s most-recent 0.25 per cent rate hike on Jan. 25, BoC governor Tiff Macklem warned that the central bank foresees continued downward pressure on the housing market through at least the first half of the year. And that the rate increase pause is dependent on higher interest having the desired effect of slowing the economy and taming inflation.
“We are pausing interest rate hikes to assess whether we’ve raised interest rates enough to get inflation all the way back to target,” Macklem said while speaking to reporters in Quebec.
“The fact that we’ve paused may bring people back into the market. These are things we’re going to have to watch,” he said.
Despite recent declines in prices, home ownership in the GTA remains out of reach for most without qualifying for and assuming significant debt far above and beyond what has been traditionally considered financially prudent.
Regardless, both TRREB and the BoC are counting on increased immigration to increase housing demand again as early as the second half of 2023.
“Record population growth and tight labour market conditions will continue to support housing demand moving forward,” said Baron.
The Canada Mortgage and Housing Corp. says construction of new homes in Canada’s six largest cities rose four per cent year-over-year during the first half of 2024, but housing starts were still not enough to meet growing demand.
The agency says growth in housing starts was driven by significant gains in Calgary, Edmonton and Montreal.
A total of 68,639 units began construction, the second strongest figure since 1990, however the rate of housing starts per capita meant activity was around the historical average and not enough “to reduce the existing supply gap and improve affordability for Canadians.”
The report says new home construction trends varied significantly across the markets studied, as Toronto, Vancouver and Ottawa saw declines ranging from 10 to 20 per cent from the same period last year.
Apartment starts in the six regions increased slightly, driven by construction of new units for rent, as nearly half of the apartments started in the first half of 2024 were purpose-built rentals.
But condominium apartment starts fell in the first six months of the year in most cities, a trend which the agency predicts will continue amid soft demand as developers struggle to reach minimum pre-construction sales required.
This report by The Canadian Press was first published Sept. 26, 2024.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
