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Median home price in Canada drops to $746,000, sales fall amid price hikes

Sales fell in 80% of domestic markets

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Home prices across Canada appear to be slipping under the weight of rising interest rates, as the median nationwide home price fell to $746,000 in April, down 6.3 percent from the March average of $796,000, according to data from the Real Estate Association. Canadian.

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The organization’s benchmark home price index — a measure designed to create an “apples to apples” comparison of typical home sales over time — also posted a 0.6 percent month-over-month decline, the first such drop since April 2020, CREA noted.

Sales volumes also fell sharply, falling by 12.6 percent on a monthly basis and 25.7 percent since last April, a record high. While the decline was led by the Greater Toronto Area market, sales fell across 80 percent of local markets.

“After two years of record-breaking, housing markets in many parts of Canada have experienced a sharp lull over the past two months, in line with a jump in interest rates and buyer fatigue,” said Jill Oudil, president of CREA, in a press release. .

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And while prices fell from March to April, the association indicated that the average price is still more than seven percent higher compared to the same month last year, and that the record price is still high by 23.8 percent year on year.

CREA’s chief economist, Sean Cathcart, said this month’s data was not a reflection on moves already made by the Bank of Canada, but rather about sentiment about how much the central bank is prepared to cut inflation.

“After 12 years of ‘high interest rates are very close,'” Cathcart said in a statement. But it’s not about what the Bank of Canada has done so far. It’s about a very steep slate of continued tightening that markets expect to play over the course of the year, because that It has already been factored into fixed mortgage rates.”

Despite the lower demand reflected in the CREA numbers, the lack of supply across the country keeps some upward pressure on prices.

However, a second set of numbers released on Monday suggests that some relief on the supply front may be on the way, as the pace of home building begins to pick up in many of the country’s markets.

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2022-05-16 15:41:59

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