Canada’s Average Home Price Falls to $746,000 in April as Sales Plunged

Canada’s Average Home Price Falls to $746,000 in April as Sales Plunged
Houses for sale in a new subdivision in Airdrie, Alberta, on Jan. 28, 2022. Jeff McIntosh/The Canadian Press
Andrew Chen
Updated:

Canada’s home prices are sinking under the pressure of rising interest rates, with the national average price falling to $746,000 in April, according to data from the Canadian Real Estate Association (CREA).

Excluding the two most active and expansive housing markets in Greater Vancouver and the Greater Toronto Area (GTA), the calculation would cut $138,000 from the national average price in April, the CREA said in a news release on May 16.

The drop in national average home prices in April was the first month-over-month decline since April 2020, according to the CREA’s benchmark Home Price Index (HPI)—which provides an “apples to apples” comparison of home prices across the country based on the value assigned by homebuyers to different housing types.

“Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” CREA chair Jill Oudil said.

“For buyers, this slowdown could mean more time to consider options in the market. For sellers, it could necessitate a return to more traditional marketing strategies.”

CREA said while the national decline was heavily influenced by the GTA market, sales fell in 80 percent of local markets.

Despite the month-over-month home price decline from March to April, the national average home price still increased by more than 7 percent compared to the same month in 2021.

CREA’s senior economist Shaun Cathcart said the data in April is less of a reflection of what the Bank of Canada has done over past years to raise interest rates, and more of what will be done to curb inflation.

“After 12 years of ‘higher interest rates are just around the corner’ here they are,” Cathcart said. “But it’s less about what the Bank of Canada has done so far. It’s about a pretty steep pace of continued tightening that markets expect to play out over the balance of the year, because that is already being factored into fixed mortgage rates.”

Data from the CREA also show a drop in the volume of national home sales in April, falling by 12.6 percent on a month-over-month basis. Monthly sales activity also dropped by 25.7 percent, lower than the record for the same month in 2021.

The number of newly listed properties lowered slightly by 2.2 percent on a month-over-month basis in April, which the CREA said was largely the result of a “fairly even” split between markets where listings increased and those where listings dropped.

“Notable declines were seen in the Lower Mainland and Calgary while listings jumped higher in Victoria and Edmonton.”