If you live in Toronto or Vancouver, it probably feels like Canada’s housing market is in a deep slump. Prices are down, homes are sitting on the market, and buyers have pulled back. But that’s not the case across the country.
Since the peak in March 2022, home prices in Ontario are down about 20% and in BC they’re down about 18%. But in most other provinces, prices are flat or even trending up. Some markets are still closer to seller’s market conditions than the downturn people in Toronto are experiencing.
So why is Ontario struggling more than the rest of Canada?
Part of it is that Ontario saw one of the steepest price surges during the pandemic, which meant there was more room for prices to fall once demand cooled. The other factor is leverage.
Ontario buyers were some of the most aggressive in the country, many investing heavily in real estate during the boom. That leverage is showing up today in the mortgage arrears data.
A recent Globe and Mail article by Hanif Bayat, Ph.D. reports that RBC is indicating 90-day arrears in Toronto are surging and are well above the national average, while arrears in Vancouver remain below the national average.
The real risk in Ontario isn’t just falling prices, it’s the financial strain on highly leveraged households. That’s what makes this downturn different from past ones, and why the stress in Toronto’s housing market feels so much deeper.
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).
Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn
