Royal LePage changes its home price forecast and now expects an annual decrease in the fourth quarter

Royal LePage is reducing its expectations for real estate prices in Canada and now predicts an annual decline in the fourth quarter, offsetting the growth seen at the beginning of this year.

According to its poll, the aggregate home price in the final three months of 2022 is expected to fall by 0.5% from the year earlier.

Meanwhile, in July, Royal LePage expected a 5% annual price increases for Q4.

The national housing market has cooled amid interest rate hikes seen this year.

Royal LePage says the national aggregate home price in Q3 went up by 3.3% on a year-over-year basis and reached $774,900, which is still 4.9% less than in the second quarter.

Royal LePage CEO Phil Soper says real estate prices reflect sales trends, meaning he expects further softening in the fourth quarter of 2022.

“September did not show the usual seasonal gain in home sales, pointing to the fact that our housing market keeps adjusting to higher borrowing costs,” – Soper noted.

“Our new forecast has national prices at below where we ended 2021, offsetting the increases reported in Q1 of this year.”