Housing crash? Don’t bet on it.
Canada is a flourishing nation with a developed economy, but it is not necessarily a very efficient market when it comes to the residential real estate sector.
After reaching a trough in Q1 2023, average prices in the Greater Toronto Area (GTA) have begun to rise again. The last few months have seen home sales returning (see Figure 1). Surging demand and low inventories have put sellers in the driver’s seat even though there is less activity in the market than before the pandemic.
Average selling prices still exceed listing prices, and the average days on the market has decreased. The transaction volumes are low but are likely to pick up if there is any indication of a rate hike pause in the near term.
The key question to ask is whether the current elevated house prices are sustainable.