The housing market in the Greater Toronto Area (GTA) has remained largely unaffected by recent rate cuts, according to a report by the Royal Bank of Canada (RBC).
Despite the Bank of Canada’s decision to lower interest rates in an effort to stimulate the economy, the RBC’s latest Housing Trends and Affordability report shows that the GTA’s housing market has not seen any significant changes.
The report states that the average price of a home in the GTA increased by 1.4% in the third quarter of 2021, compared to the same period last year. This is in line with the national average, which saw a 1.5% increase.
RBC’s senior economist, Robert Hogue, explains that the lack of impact from rate cuts is due to the already high prices in the GTA housing market. He notes that the market is “already stretched to the limit” and that the rate cuts have not been enough to make a significant difference.
The report also highlights the ongoing issue of housing affordability in the GTA. RBC’s Housing Affordability Measure, which calculates the proportion of pre-tax household income needed to cover the costs of owning a home, shows that the GTA remains one of the least affordable housing markets in Canada.
Hogue notes that the lack of affordability is a major concern for potential homebuyers, especially first-time buyers. He adds that the current market conditions are making it increasingly difficult for them to enter the market.
The RBC report also predicts that the GTA’s housing market will continue to see modest price increases in the coming months, as demand remains strong and supply remains limited.
In conclusion, while the Bank of Canada’s rate cuts have had little impact on the GTA’s housing market, the issue of affordability remains a major concern for potential homebuyers. The RBC’s report serves as a reminder that the housing market in the GTA is still facing significant challenges, and more needs to be done to address them.
