Real estate prices keep going down in Canada

Last month, Canadian real estate prices kept going down for the seventh month in a row. As a result, now they are almost 9% lower than in March.

According to the recent report by the Canadian Real Estate Association (CREA), the average home price was $766,000 in September, marking a 1.4% decline from August. The largest drop was seen in the Greater Toronto Area.

Meanwhile, other cities, for instance, Calgary and Ottawa, saw higher benchmark prices in September compared to the previous month.

Home prices in a red-hot housing market went up sharply during the first two years of the COVID-19 pandemic. Recently, they have started falling amid a number of rate increases by the Bank of Canada and significantly weaker purchase activity.

CREA says real estate sales in September showed a monthly decline by 3.9% and an annual decrease by 32.2%, meaning that last month’s sales were almost 12% lower than the pre-pandemic 10-year average for that month.

CREA’s senior economist Shaun Cathcart noted that it was important to remember the market was still in the middle of “a period of sharp adjustment”, as buyers and sellers are trying to “feel each other out”. Meanwhile, many people decided to postpone their home purchase.

“Resale markets may be still quiet for some time yet,” – he said. “However, it puts even more pressure on rental markets.”

Although the housing market is cooling and prices are going down, there’s almost no signs that the BoC will change its rate-hike trajectory this year, with another increase by at least 0.5% expected on October 26.