Editorial | Welcome cooling in housing market

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StarEditorial: The correction in the housing market has arrived, as the latest numbers released by the Toronto Regional Real Estate Board made clear.

You may have noticed the house around the corner with the For Sale sign planted on its lawn.

Naturally enough, the reports were headline generating. It’s human nature to be keenly attentive to such language as “plummet,” or “historic correction,” or images of popping bubbles. We can agree that the housing market has been galloping through a prolonged stage of delirium, one in which abnormally low interest rates played a central role. And then came COVID, with the Bank of Canada responding to the economic impacts of the pandemic by lowering its key interest rate to one quarter of a per cent.

There is an upside. TRREB notes that buyers benefit from more choice. And while the average selling price was up a titch compared with last year at 1.2 per cent, there have been month-over-month price dips. What the data really demonstrates is not price growth, but price moderation. Here’s a cocktail party nugget: a decade ago the average price for a home in Toronto was a sliver shy of $500,000. It took just 10 years to blow through the million-dollar mark.

 

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