GTA

Average house price down by more than $170,000 since February

Canada’s housing market continued its slowdown last month, with the volume of home sales down by more than a third compared to the boom times of last year — and prices down by almost 10 per cent since then, too.

The Canadian Real Estate Association, which represents Realtors, said in a release Tuesday that the national average selling price of a home that sold in October went for $644,643. That’s down by 9.9 per cent compared to the same month a year earlier, and down by even more from the peak of $816,720 in February 2022.

That was before the Bank of Canada began its aggressive campaign of hiking interest rates to rein in inflation. The central bank has raised its benchmark rate a half dozen times since then, and the impact on the housing market has been dramatic.

Average selling prices are down by more than 20 per cent since February, with prices down in just about every market across the country, or flat in a few.

How house prices have changed in Canada’s major cities

Seasonally adjusted average home prices between October 2021 and October 2022

house price - canada - milenio stadium

CREA says the average selling price can be misleading, however, since it is easily skewed by sales in big expensive markets like Toronto and Vancouver, so it trumpets a different figure, known as the House Price Index, as being a better gauge of the overall market.

The HPI came in at $756,200 in October. That’s a decline of 1.2 per cent during the month, which CREA says is the smallest decline since June. But its also down by 8.2 per cent compared to what it was six months ago.

Prices are down from their peak, but higher rates mean that houses aren’t actually getting much more affordable, because they cost two to three times as much to finance now as they did earlier this year.

One buyer’s remorse
Sid Joshi knows this first-hand. He bought a townhouse in Stittsville, a suburb of Ottawa, in February for about $400,000. Prior to the pandemic, the home he bought probably would have only cost about $300,000, but he found the courage to buy because he wanted to start building equity, and he could easily afford the mortgage payment.

“When I bought the the condo, the interest rates were 1.2 per cent, so my monthly payment was still manageable [at] $1,400 per month,” he said.

But the loan he agreed to was a variable rate one, and within weeks, his payment starting going up with each Bank of Canada rate hike.

He’s now paying more than $2,100 a month, and even worse for him, he thinks his home might only fetch $360,000, based on recent sales.

“It’s very discouraging and I regret my decision of buying this property,” he said. “I should have waited.”

His tale is likely familiar to many Canadians who bought during the pandemic, when record-low interest rates poured gasoline on to the red-hot housing market, driving prices higher.

October’s data clearly show the trend is now heading in the opposite direction as sales slump and prices inch lower and lower. But CREA says beneath the headline numbers, there’s reasons to think that the worst of the slowdown may be in the rear-view mirror.

“October provided another month’s worth of data suggesting the slowdown in Canadian housing markets is winding up,” CREA’s economist Shaun Cathcart said. “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.”

Others think that optimism is a tad overstated. Sales may have inched up from their September low, but they were still about 15 per cent below the 10-year pre-COVID average for the month, which suggests things are still a long way from getting back to some semblance of normal.

“This was the quietest for unit volumes since the economy was climbing out of recession in 2010,” BMO economist Robert Kavcic noted.

“Tumbleweeds continued to blow across the Canadian housing market in October,” he said. “But it could be worse.”

Redes Sociais - Comentários

Artigos relacionados

Back to top button

 

O Facebook/Instagram bloqueou os orgão de comunicação social no Canadá.

Quer receber a edição semanal e as newsletters editoriais no seu e-mail?

 

Mais próximo. Mais dinâmico. Mais atual.
www.mileniostadium.com
O mesmo de sempre, mas melhor!

 

SUBSCREVER