Toronto home prices fall in January, down 22% from peak

TORONTO, Feb 3 (Reuters) - Home prices in the Greater Toronto Area (GTA) fell in January as higher borrowing costs weighed on the city's once-red-hot housing market, data from the Toronto Regional Real Estate Board (TRREB) showed on Friday.

The average price of a GTA home fell to C$1.04 million ($780,957) in January, down 1.2% from December and down 16.4% from a year ago. Prices were about 22% below February's peak.

Sales tumbled 44.6% from a year ago, while new listings were down 3.7%.

"Home prices declined over the past year as homebuyers sought to mitigate the impact of substantially higher borrowing costs," TRREB chief market analyst Jason Mercer said in a statement.

"While short-term borrowing costs increased again in January, negotiated medium-term mortgage rates, like the five-year fixed rate, have actually started to trend lower compared to the end of last year."

Last week, the Bank of Canada signaled it would pause its interest rate hiking campaign after it raised its benchmark rate to a 15-year high of 4.50%.

Investors are betting that the central bank will shift to cutting rates in the final quarter of 2023.

($1 = 1.3317 Canadian dollars) (Reporting by Fergal Smith; Editing by Stephen Coates)