These Ontario cities are expected to see the biggest home price declines

While Toronto has seen a significant dip in home prices as borrowing costs have gone up over the past year, other places in Ontario are seeing an even more dramatic drop according to a new report released Monday.

While Toronto has seen a significant dip in home prices as borrowing costs have gone up over the past year, other places in Ontario are seeing an even more dramatic drop according to a new report released Monday.

The report, from economists at financial services company Desjardins, examined the Ontario housing market in the context of recent developments, such as interest rate hikes and supply.

It found that Ontario is projected to see the biggest correction compared to other provinces in Canada, an anticipated 25 per cent drop by the end of 2023 from the market’s peak.

However within Ontario, the GTA is not the location where prices are projected to fall the most.

“Given nearly half of existing home sales take place in the Greater Toronto Area (GTA), that market tends to garner the most attention,” the report notes. “But during the pandemic, it was surrounding communities that grabbed more of the headlines. Home prices rose significantly in the GTA, but not nearly as much as they did in smaller Ontario communities or nationally for that matter. And these places are expected to continue seeing the biggest correction.”

Places like Windsor, Oshawa, Sudbury and London saw skyrocketing home prices from Dec. 2019 to the market’s peak during the pandemic, rising between 75 per cent to close to 100 per cent in a short period. But that means there’s a long way to fall from those peaks now that the real estate market has cooled off.