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The median home price drops to $1.254 million
Publication date:
May 04, 2022 • May 4, 2022 • 3 minutes read • 60 comments 
Toronto home prices fell 3 percent month-on-month in April.
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Toronto home prices fell 3 percent month-on-month and sales fell sharply in April as rising interest rates began to weigh more heavily on the housing market.
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While the median home price of $1.254 million was still up 15 percent year-on-year, sales were down 41 percent compared to April and 27 percent compared to the previous month, the Toronto Regional Real Estate Board said on Wednesday .
“Based on the trends observed in the housing market in April, it certainly appears that the Bank of Canada is achieving its goal of slowing consumer spending while battling high inflation,” TRREB President Kevin Crigger said in a press release. “Going forward, it will be interesting to see how the Bank of Canada strikes a balance between fighting inflation versus slowing economic growth and the associated government revenues while we continue to recover from and pay for pandemic-related programs.”
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In the fight against the highest rate of inflation in decades, the Bank of Canada has so far raised its key interest rate by 75 basis points to 1 percent. These rate hikes have started to spread throughout the mortgage market, raising the cost of borrowing.
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The supply problem is one that Canada’s leading housing authority is grappling with. In the first in a series of reports on the subject this week, the Canada Mortgage and Housing Corporation found that supply in Canada’s largest cities, particularly places like Toronto, has not kept pace with population growth.
The combination of low supply and steady demand from immigration could be one reason not everyone is seeing a slowdown.
Cailey Heaps, president and chief executive officer of the Toronto-based Heaps Estrin Real Estate team, told the Financial Post her team doesn’t see as big a market shift as TRREB’s latest results suggest.
“That’s really not consistent with our current experience,” Heaps said. “We don’t see a slowdown to the extent that … this release would make you think.”
Heaps pointed to regional data from Toronto-based firm Realosophy that showed the Toronto area saw sales fall 14 percent from March to April. She added that the numbers are skewed by the surrounding 905 region, although she still sees strength in that area as well.
“The spring market feels like it’s still alive,” said Heaps. “I think it’s fueled by lack of inventory and obviously immigration numbers, and the uniqueness of the product that Toronto buyers are looking for is what keeps them in the market.”
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