The Toronto housing market experienced a slowdown in January 2023, with sales dropping to the lowest level since the early months of the Covid-19 pandemic.
The number of homes sold was 3,100, which is a decrease from December 2022.
The rise in borrowing costs has impacted the housing market in Canada, with sales dropping and prices coming under pressure.
The benchmark price for a home in Toronto fell 0.2% from December to approximately $1.08 million, and was down 14% from a year earlier.
Despite the recent decline, prices are still 28% higher than before the pandemic, making it difficult for potential buyers to afford homes at current mortgage rates.
The Bank of Canada raised its benchmark interest rate to the highest level since late 2007 in an effort to control inflation, which has made it even harder for potential buyers to afford homes.
In January, fewer sellers put their homes on the market, with new listings dropping 3.7% from the previous year. However, inventory still increased, with 9,299 properties for sale, more than double the previous year's total.
The real estate board expects buyers to return as the Bank of Canada may pause its rate hikes, easing the pressure on mortgage rates.
Despite this, the market remains expensive for buyers and economists predict that prices will need to come down further for a wider range of buyers to be able to afford homes.