First-time homebuyers looking to avoid higher interest rates and tighter mortgage rules have helped to prop up the real estate market.
But higher house prices mean many homeseekers have had to lower their sights when it comes to owning their dream home.
“Many purchasers are scaling back on expectations or are willing to sacrifice location, quality or size,” Michael Polzler, executive vice-president of ReMax Ontario-Atlantic Canada, said in a report released yesterday.
The spring real estate market in Toronto saw sales down by 11 per cent last month compared to a year ago, according to a separate report released yesterday by the Toronto Real Estate Board.
However, it was still the second-best March on the books, with 9,262 transactions, compared to a record 10,430 in March 2010.
The Bank of Canada’s low benchmark rate of one per cent has been a boon to the real estate market. But the cheap money environment is not expected to last. This week many of Canada’s major banks raised their mortgage rates.
On a brighter note, analysts say they do not see major increases in home prices down the road, so buyers will have more time to shop for the right home.