House prices are on track to lower across Canada, especially in Ontario, for the simple reason that the real estate market is "cooling down," and the market has transitioned from a seller's market to a balanced one (McAlinden, 2022, para. 1).
Interestingly enough, low rise properties and condominiums are showing the most evidence of this with the values of those types of properties lowering by about 15-20% with the potential to continue (McAlinden, 2022, para. 3). Although, the past two years saw a significant increase of house prices, which were about 50%, so to see a drop of about 15-20% isn't too crazy considering the increase of mortgage rates (McAlinden, 2022, para. 4).
That being said, there are a variety of reasons that could cause a decrease in home prices, or the real estate market to slow down, which include the current increase of mortgage rates, buyer's fatigue, and just simply a change in the demand for homes. However, the current increase of mortgage rates is also an important factor for the lowering of house prices in order to combat inflation. This is because the increase of interest rates is affecting affordability, which is in turn affecting property values and the prices they are being sold at (McAlinden, 2022, para. 8). Ultimately, the Bank of Canada's objective is to keep inflation at 2%, which is cause for mortgage rates to increase in order to decrease inflation (McAlinden, 2022, para. 15).
One important factor to consider is that value is always perceived and unique to the person interested in the object. Just because you wouldn't pay about $450,000 for a 2 bed 1 bath home (as an example), it doesn't mean that someone else would if it is perfect for them and if they'll have it for forever. The increase in rates mainly means that people will just be spending more on their mortgage. It's an adjustment that might seem intense or crazy, but it is an adjustment none the less (McAlinden, 2022, para. 17). Like all adjustments, it will take a bit of time for everyone to get use to, so it certainly shouldn't deter you from trying to sell or purchase your next home!