In the GTA, where Newmarket resides, there’s been a slight decrease in the cost of single family homes and apartments from July to August.
Single family homes dipped from an average of $1.402 million to $1.393 million from July to August, with apartments seeing a similar decline going from $727,700 to $725,400. Townhouses saw an increase from $845,800 in July to $855,000 in August.
“Single family homes tend to be affected first before semi-detached, attached townhomes and smaller sized condos,” said Newmarket resident and local real estate broker Wasim Jarrah, who is director for central Ontario realtors with the Ontario Real Estate Association. “In Newmarket, the average price of a home hit almost $1.17 million, that’s an insane number. Those homes will be affected first and you’ll see the dip first.”
In January, at the beginning of the year, single family homes in the GTA averaged $1.268 million and steadily increased until July before dipping down in August. This comes after an all-time high average of $1.55 million in February 2022; in January 2005, single family homes in the GTA averaged $367,000.
Apartments have followed a similar trend in the GTA, seeing the low of the year, thus far, in March at $682,000 before reaching a high in July and beginning to trend down in price in August.
While the cost of single family homes has decreased since July, this is the most expensive they’ve been in August. At this time last year, the average cost was $1.34 million. And in August 2021, the average was $1.25 million and $1.03 million in August 2020.
Compared to the rest of Ontario, the GTA is the most expensive region in the province. In August, the average price of a single family home in Ontario was $1.01 million, more than $300,000 less than the GTA.
Once again, the data was similar with the average apartment being $652,800 in Ontario, nearly $75,000 less than in the GTA.
Jarrah said that the best things prospective home buyers need to do, given the climate of the housing market, is find a reputable realtor and prepare to save while reducing expenses.
“One of the biggest issues right now is that a lot of Canadians haven’t changed their spending habits,” he said. “Take a look at the last TransUnion report, the number was $2.3 billion in debt. Things have gotten more expensive and Canadians haven’t changed those spending habits. A lot more is going on credit cards, interest has gone up, lines of credit have gone up, car payments have gone up.”
It takes an effort from the average Canadian to spend less, plan more and budget, said Jarrah.
“My estimate is the market will drop another 20 per cent in the next two to five months,” said Jarrah. “I think we know that interest rates will be going down, given that we predict housing prices will go down, then Canadians who need to buy will find an optimal opportunity if they’re financially planning for it.”
Canadian home sales fell 4.1 per cent in August compared to July, the Canadian Real Estate Association reported.
“The Number 1 thing that has played into it is the interest rate hike,” said Jarrah. “What they tend to do is soften the demand and some of the reasons are people can’t get approved for a mortgage, the carrying costs become very high so affordability erodes. People then start looking at other options like renting.”
Part of the decline was led by Ontario communities, notably Ottawa, Hamilton-Burlington, as well as London and St. Thomas.
"August was the first full month of housing data following the Bank of Canada’s July rate hike, so a dip in activity was expected,” Shaun Cathcart, CREA’s senior economist, said in a release.
“The demand is obviously still there, and it will be back, but as the housing affordability crisis re-emerges as a top policy issue, for now, the slowdown on the buyer side should help keep a lid on prices.”
CREA said that the aggregate composite home index rose 0.4% nationally on a month-over-month basis in August 2023.
That is “ … only about half as large as the July gain, which was only about half as large as the gains recorded in April, May, and June,” the release said. “This levelling off of prices is in line with slowing sales and a rebound in listings.”
While most of the country has seen solid price growth, Ontario is a “mixed bag,” with some of Canada’s biggest increases, but also biggest declines, depending on the region.
“Some people will wait it out,” said Jarrah. “There’s talk right now that interest rates will start coming down mid to end of next year. Some people who don’t need to buy will just wait it out.”
