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Interest rate increases for mortgages are having an impact on Canada’s resale real estate market, but the effects are uneven with different regions experiencing divergent conditions as a result, according to a new report.
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RBC Economics noted that in some cities buyers retreated from the market, including Toronto, Hamilton and Ottawa. But other markets saw increases in activity, including Calgary.
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Despite Toronto seeing declines in sales month over month of about seven per cent, prices still increased 2.5 per cent month over month and were up nearly nine per cent since the cyclical bottom in February, RBC noted. Overall, Toronto sales were up about 17 per cent year over year, too, with new listings down about three per cent, pointing to still strong demand and limited supply.
Edmonton has been on a different trajectory with sales down about two per cent year over year, while new listings fell nearly 15 per cent, RBC found.
Calgary was among the markets showing increases in activity with sales up almost 11 per cent in June from the same month last year while new listings fell about three per cent.
RBC noted that increased supply in some larger centres was good news to help stem price increases, but overall affordability remains a concern across all markets.
With borrowing costs also expected to remain higher, Canada’s overall real estate market’s upside will likely be limited in how much it can grow in the near term, the report added.
It further noted that already most major markets are exhibiting balanced conditions between buyers and sellers with only Calgary remaining a market still favouring sellers due to ongoing high demand and low supply.
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