Real estate prices keep going down for 6 months in a row, but sellers are ready to wait

According to the recent report by the Canadian Real Estate Association (CREA), housing prices kept going down in August for the sixth month in a row.

Seasonally adjusted prices fell by 1.6% from July, but were still 7.1% above the results of August 2021.

Meanwhile, not seasonally adjusted price rose by 1.2% on a monthly basis and reached $637,673, which is 4% lower, than a year earlier.

Real estate sales were down by 1% from July and now are almost 25% lower than a year ago.

“August showed almost no monthly changes in national sales for the first time since February, which, combined with a stabilization of demand and supply conditions in many markets, could mean that this year’s rapid change in housing markets across Canada may have mostly come to an end,” – noted CREA chair Jill Oudil.

“Meanwhile, certain buyers may prefer to wait for more signs that borrowing costs and prices are stabilizing,” – she noted.

The report says new listings fell by 5.4% from July, following its 5.9% drop.

Period of time necessary for selling all the listings kept improving and reached 3.5 months, which is slightly more than 3.4 months reported in July and well above a record low of 1.6 months seen earlier this year.

The largest prices decrease was seen in Ontario, with British Columbia following. Alberta reported prices increase, as well as Saskatchewan and Prince Edward Island.

In case we exclude the expensive markets of the Greater Toronto and Vancouver areas from calculation, the average price will reach $522,873.

BMO economist Robert Kavcic says the sales-to-new listings ratio improved to 54.5% last month, “which is better, but still not a buyers’ market.”

“In other words, some markets show growing supply, but we’re still too far from any massive hike,” – he explained. “We can see very little forced selling in the market, as sellers often are glad to wait for better conditions.”

He says investors “also have a very tight rental market.”

“While cash flow conditions have deteriorated sharply because of higher rates, rents are going up in the major centres as a partial offset,” – he added.