Sales volumes for house sales are close to where they were before the start of the COVID-10 pandemic. Housing prices in Canada have decreased in the last 3 months to an average of $711,000. This is almost a $100,000 decrease in prices. The main reason being cited is the rise in the lending rate.
If Toronto and Vancouver are stripped out of the numbers, the average price of a Canadian home that sold in May was $588,500.
The biggest factor driving the national number lower is Ontario, where most markets are seeing significant price declines. Rishi Sondhi, an economist with TD Bank, said there's an interesting regional story playing out beneath the picture of the national market.
A new survey has also found a high stress level among Canadians who fear losing their homes. An online survey conducted between April 14 and April 20, found that:
18 per cent of homeowners polled are already at a stage where they can’t afford their homes.
Nearly one in four homeowners said they will have to sell their home if interest rates go up further. The Bank of Canada’s overnight rate indeed rose by half a percentage point to 1.5 per cent on June 2, six weeks after the poll was taken.
The Bank of Canada will undoubtedly raise their lending rate throughout 2022 so stressed homeowners will not get any relief from higher interest rates.
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