Ottawa New Listings

Home prices continued to fall in August, marking the sixth consecutive month of declines, according to the Canadian Real Estate Association.

In seasonally adjusted terms, prices were down 1.6% from July, but remain 7.1% above year-ago levels, CREA reported.

The actual (not seasonally adjusted) price, meanwhile, bumped up in August to $637,673. That’s up 1.2% from July, but down 4% from August 2021.

Home sales edged down 1% on a monthly basis and are now down nearly 25% from a year ago.

“August saw national sales hold steady month-to-month for the first time since February, which, along with a stabilization of demand/supply conditions in many markets, could be an early sign that this year’s sharp adjustment in housing markets across Canada may have mostly run its course,” said CREA chair Jill Oudil.

“That said, some buyers may choose to remain on the sidelines until they see clearer signs of borrowing costs and prices also stabilizing,” she added.

New listings were down by 5.4% compared to July following the 5.9% monthly decline recorded in July.

Months of inventory continued to improve slightly, rising to 3.5 months. That’s up from 3.4 in July and a record low of 1.6 earlier this year.

Regionally, Ontario saw the brunt of the price declines, followed by British Columbia to a lesser extend, CREA noted. It also suggested that prices have now peaked in Alberta, while prices continued to rise in Saskatchewan and Prince Edward Island.

Removing the high-priced markets of the Greater Toronto and Vancouver areas, the average price stands at $522,873.

Cross-country roundup of home prices

Here’s a look at select provincial and municipal average house prices as of August, with their annual and monthly changes, as well as the total decline since the national average price peaked in February 2022.

Location Average Price Annual price change Month-over-month change Decline from February 2022
Quebec $484,070 +7.1% -1% -2.9%
B.C. $910,914 +1.3% -0.5% -17%
Ontario $829,739 -0.6% -0.2% -23.6%
Alberta $423,879 +1.8% -3% -12%
Halifax-Dartmouth $512,100 +17.9% -4% +11.5%
Barrie & District $830,000 +5.6% -4.3% -11.7%
Greater Toronto $1,124,600 +8.8% -2.8% -16%
Victoria $953,800 +18.1% -2.2% +1%
Greater Vancouver $1,180,500 +7.4% -2.2% -10%
Greater Montreal $523,700 +8.5% -1.8% -4%
Calgary $521,300 +11.9% -1% +7.7%
Ottawa $650,200 +4% -3.6% -11%
Winnipeg $346,500 +4.1% -1.5% +1.2%
St. John’s $320,400 +8.4% +0.6% +9%
Edmonton $392,400 +4.3% -2.7% +16%

It’s important to note that some of the movements in the table above may be somewhat misleading, since average prices simply take the total dollar value of sales in a month and divide it by the total number of units sold, Scotiabank economist Farah Omran pointed out.

“Fluctuations in the average selling price therefore can overestimate movements in the market as more people shift to smaller, more affordable units as they get priced out of larger, more expensive, ones,” she wrote in a research note.

The MLS Home Price Index accounts for differences in house type and size, and is currently just 7% below the February peak and 41% above pre-pandemic levels, Omran added.

“Very little” forced selling

The sales-to-new listings ratio improved in August to 54.5%, “still soft, but not a deep buyers’ market,” BMO economist Robert Kavcic noted in a report.

“Simply put, some markets do have supply lingering, but we’re far from any widespread flood,” he wrote. “Anecdotally, there’s very little forced selling in the market, with sellers in many cases happy to pull listings and wait for better conditions.”

He added that investors “also have a very tight rental market to fall back on.”

“And, although cash flow conditions have deteriorated significantly because of higher rates, rents are surging in the major centres as a partial offset,” he said.

CREA revises its market forecast

Alongside the release of August resale housing data, CREA also cut its forecast for home sales and prices for 2022 and 2023.

The association now expects 532,545 properties to trade hands via the MLS system in 2022. That would represent a 20% decline from 2021’s annual record. CREA’s previous forecast released in June had expected a 14% decline.

It also sees home prices rising by an annual rate of 4.7% to $720,255, followed by a slight gain of 0.2% in 2023 to $721,814. CREA had previously forecast a 10.8% annual increase in home prices in 2022.

“Much of that increase reflects how high prices were to start the year,” CREA said in a release. “Annual price gains are forecast to be largest in Quebec and the Maritimes.”

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