The news will come as a further worrying development for buyers in the Toronto market, one that’s become increasingly unaffordable for new entrants in particular. Still, while those rising prices show no signs of slowing down at present, RBC’s chief economist Robert Hogue (pictured), who penned the recent report, told Canadian Mortgage Professional that some degree of cooling-off was to be expected by the end of this year.
Read next: Canada housing crash – how likely is it?
“When you look at the reasons for why prices have gone up, it’s because there’s just not enough supply to meet demand at this point,” he said. “We don’t think this is sustainable, especially in light of the Bank of Canada being about to raise interest rates in a material way over the next year and half.
“Our view is that the current situation will start to ease, in our best guess, probably over the second half of this year. Those kinds of price increases that we’ve seen and are still seeing now are poised to moderate later this year, and quite likely well into 2023.”
With the Bank of Canada having indicated in its January rate announcement that future hikes are on the way, Hogue said those increases – likely to total at least three by the end of the year – would cool demand “by a few degrees over time.”