Toronto Condo Prices Take a Dip, and Experts Urge First-Time Buyers to Open FHSA Account Before Year Ends

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Every Friday, Wahi brings you the most important real estate stories from the past week.

The Inflation Data that Stole Christmas  

Canadian homeowners are getting a lump of coal this holiday season, rather than the lower interest rates they had requested. That’s because the Bank of Canada’s fight against inflation appears to be at a standstill, with Statistics Canada reporting that headline inflation was unchanged in November, and remains at the 3.1% rate recorded in October. That could further delay a drop in interest rates. In his year-end remarks Governor Tiff Macklem revealed his New Year’s Resolution, suggesting some hard work and financial pain at the start of the year will “pave the way to a more balanced economy” in 2024.

Housing starts? More like “Housing Stops.”

Canada’s efforts to build its way out of the housing crisis appear to be in a downward spiral, with high interest rates and inflation slowing the pace of construction that’s needed to help bring down inflation and interest rates. According to the Canadian Mortgage and Housing Corporation’s latest report housing starts plunged 22% in November compared to October on a seasonally adjusted annual basis. The declines were sharpest in urban areas and among multi-unit residences. The report notes that high borrowing costs and labour shortages will continue to slow the pace of new home construction in the months ahead.

Boxing Day Comes Early in Downtown Toronto

Just a few months ago getting a condo in downtown Toronto for less than $1,000 per square foot (PSF) was a steal; now it’s above average, demonstrating the latest sign of a market correction. According to data collected by Strata Realty, condos in the core are going for $997 per PSF, dropping below four-digits for the first time since January 2021. By comparison, prices peaked at $1,203 PSF in February of 2022. In 2023 that metric hit a high of $1,127 in May and has been gradually falling ever since. With inventory in decline, however, expect a return to four digits soon.      

Last Call for First-time Homebuyers 

The clock is ticking for Canadians to open a First Home Savings Account (FHSA) this year, and experts urge every potential first-time buyer to do so before the ball drops on 2023. That includes “Wealthy Barber” David Chilton, who published an emergency TikTok on the new savings tool. Like RRSPs, the account lets future first-time homebuyers stash away up to $8,000 per year tax-free, up to a lifetime limit of $40,000, with unused contributions carrying over to the next year. That means putting away just $1 before New Year’s Day could protect another $7,999 from taxes in the future.

The Great Correction is Upon Us  

Isaac Newton once observed that “what goes up must come down,” but it shouldn’t take an apple to the head to see how Canada’s housing market growth was unsustainable. Now experts warn that we’re on the other side of gravity, and things are coming down fast. According to a recent RBC report most regions in Canada are now in correction mode, with affordability challenges bringing the market crashing down. Sales have declined by 13% since June, as the correction that hit the overheated big cities and populous provinces spread from the Maritimes to the Prairies and through the West Coast.

Share this article on social.