Housing market slowdown continues, with average selling price down 13% since February
Canada’s housing market continued to calm down from its red-hot pandemic tempo in Might, with the common worth of a Canadian residence that offered throughout the month going for $711,000, a decline of greater than $100,000 up to now three months.
Whereas Might is often a powerful month for residence gross sales, the Canadian Actual Property Affiliation (CREA) mentioned Wednesday that the amount of houses that offered fell precipitously throughout the month, down by 20 per cent in contrast with the identical interval a 12 months in the past.
The slowdown implies that residence gross sales at the moment are lastly again to the extent they have been at earlier than the COVID-19 pandemic, the realtor group mentioned.
After cooling down in March and April 2020 because the pandemic was unfolding, Canada’s housing market has rebounded strongly, with promoting costs and gross sales volumes setting document excessive after document excessive for a lot of the previous two years.
However that momentum has shifted noticeably in latest months, as lending charges that have been slashed early within the pandemic begin to rise, making mortgages costlier and lowering consumers’ buying energy.
CREA says the common worth of a house that offered on its A number of Itemizing Service final month went for $711,000. That is down by greater than 13 per cent from the all-time excessive of $816,720 set again in February 2022.
“In the end this has been anticipated and forecast for a while — a slowdown to extra regular ranges of gross sales exercise and a flattening out of costs,” CREA’s chief economist Shaun Cathcart mentioned in a launch.
CREA says the common worth determine might be deceptive as a result of it’s simply skewed by gross sales in massive costly markets like Toronto and Vancouver. So it calculates one other quantity, generally known as the Home Value Index (HPI), which it says is a greater gauge of the market as a result of it adjusts for the amount and kinds of housing.
The HPI edged down by 0.8 per cent within the month, CREA says, following a 1.1 per cent lower in April. However it’s nonetheless greater than 19 per cent larger than it was final 12 months, largely due to the eye-popping positive aspects seen in late 2021.
The identical might be mentioned of the common worth determine, which continues to be 3.4 per cent larger than it was a 12 months in the past, regardless of three month-to-month declines in a row.
Completely different tendencies throughout the nation
If Toronto and Vancouver are stripped out of the numbers, the common worth of a Canadian residence that offered in Might was $588,500.
The largest issue driving the nationwide quantity decrease is Ontario, the place most markets are seeing important worth declines.
Vancouver Island noticed costs improve, whereas Vancouver was flat and the remainder of B.C. noticed largely declines.
“Costs have been kind of flat throughout the Prairies save for small positive aspects in Saskatoon and Winnipeg,” CREA mentioned. “In the meantime, Quebec, New Brunswick and P.E.I. continued to outperform with notable positive aspects, whereas costs in Nova Scotia and Newfoundland and Labrador edged up barely.”
