Condo Market Report - August 2022

Can this market get any slower? Sales for July on TRREB were 4912 units. This was down 47% from July of last year, but more importantly to market watchers, down 24% from June. This marks four consecutive months of sale decreases. If there is a sliver of hope, ‘active listings’ for July are 5% lower than June, even with weaker sales. Yes, prices are falling back to 2021 levels (see our tables below) with a decrease of about 15% so far. Not all sellers are desperate to sell and many are just taking their properties off the market and will wait for prices to recover.

There are a significant number of buyers on the sidelines – both end users and investors. All are waiting for the market to bottom out. No signs yet, with another round of Bank of Canada increases scheduled for September. Our ‘yield curve’ (which tracks interest rates across various term periods) has turned negative meaning short term interest rates are higher than longer term rates. Usually, it is the reverse. This is a sure sign that we are heading for a recession. When it comes, look for the Government to move quickly. They have no more room for spending so look for them to pause any more interest rate hikes and to make changes to the mortgage rules – reducing the stress test, longer mortgage amortizations, etc.