Home prices across Canada fell for the first time in two years last month as a growing number of buyers remain on the sidelines in the face of rising borrowing costs.
The latest data from the Canadian Real Estate Association showed the national house price fell 0.6% between March and April, marking the first decline since April 2020, while remaining 23.8% above from last year’s levels. The majority of last month’s declines were concentrated in Ontario’s real estate markets, namely the smaller communities surrounding Toronto, which until recently have seen some of the largest price increases and subsequent increases in demand. of accommodation.
Total home sales also fell in April, indicating that the housing market is beginning to cool in response to the central bank’s move toward more hawkish monetary policy amid soaring inflation. CREA data showed home sales fell 12.6% month-on-month, putting real estate activity at the lowest level since the summer of 2020. The drop in sales of the last month was led by the Greater Toronto Area, with 80% of local markets reporting declines. .
“After two record years, housing markets in many parts of Canada have cooled quite sharply over the past two months, driven by soaring interest rates and buyer fatigue,” explained ICA President Jill Oudil. The inflationary environment is exacerbated by continued supply chain disruptions and a global spike in commodity prices, prompting policymakers to adopt ultra-loose monetary policies and quickly phase out stimulus from the economy.
But, even despite a slowdown in home price increases and sales levels, there was still just 2.2 months of inventory in April, compared to the five-month long-term average. . “After 12 years of ‘higher interest rates are just around the corner,’ here they are,” said Shaun Cathcart, senior economist at CREA. “But it’s less about what the Bank of Canada has done so far. This is a fairly rapid pace of continued tightening that markets expect to play out over the rest of the year.
The information for this briefing was found via CREA. The author has no security or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author holds no license.