The average home price in Canada is down to about $645,000 from a dramatic peak of over $800,000 in February, according to the Canadian Real Estate Association (CREA). But the drop in prices is slowing and sales are picking up.
It could be the beginning of the end for the market downturn, say analysts.
“Sales actually popped up from September to October, and the decline in prices on a month-to-month basis got smaller for the fourth month in a row,” said Shaun Cathcart, CREA’s senior economist, in a report published Nov. 15.
An RBC report published the same day said: “The pace of decline is now slowing—there was even a tiny monthly increase in home resales nationwide in October—marking a notable shift from the deep fall in activity that took place over the spring and summer. Property values are still clearly coming down at this stage but last month’s drop was the smallest since May.”
Predictions
RBC predicts that rising interest rates and the loss of affordability will keep the market quiet into early 2023. Prices will continue a slow decline, bottoming out in the spring.CREA Chair Jill Oudil said in the CREA report that, “Moving into 2023, sellers and buyers will likely continue coming off the sidelines, but it’s a very different market compared to just one year ago.”
The national average home price was $644,643 in October, down 9.9 percent from the same month last year, said CREA. If you remove Vancouver and the GTA from the calculations, the national average home price is about $520,000.
Outliers
Cambridge, Ontario, is the city with the largest decline from its peak home prices this year, said RBC. Prices there fell 22 percent since their peak earlier this year. Calgary, on the other hand, has been an “exception to the rule” during this year’s decline, RBC said.“While activity is down from sky-high levels at the start of this year, it’s still far above pre-pandemic levels. And prices are holding up.” Prices have been essentially stationary there since April, said RBC. “We expect this to continue as demand-supply conditions are among the tightest in Canada.”
