ZOLO Ottawa Real Estate

The average price for a house in Canada fell for the second straight month in April, posting a 12.6% decline from March.

Home sales came in at 54,894, a 25.7% decline from last month, but was still the third-highest April sales figure ever behind 2021 and 2016, according to data from the Canadian Real Estate Association (CREA).

“Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” said Jill Oudil, Chair of CREA.

The MLS Home Price Index, which removes some of the volatility from seasonality, recorded a smaller month-over-month decline of 0.6% (although it was the first decline in two years), and was up 23,8% compared to a year ago (vs. the 27.1% annualized increase recorded in March).

The average home price came in at $746,146, down 12.6% from March, but still up 7.4% from a year ago.

Removing the high-priced markets of the Greater Toronto and Vancouver areas, the average price stands at $608,146, which is 10% higher than a year ago.

The number of months of inventory rose to 2.2, up from its all-time low of 1.6, but still well below its long-term average of around five months, CREA noted.

Cross-country roundup of home prices

Home prices continued to rise in most regions, although the pace of growth was slower compared to what was seen in February. In the past month, average prices increased by $36,000 in the Greater Toronto Area (vs. $80,000 in the previous month), $47,100 in the Greater Vancouver Area (vs. $58,200), $17,800 in Barrie, ON, and district (vs. $60,300), $20,200 in Ottawa (vs. $40,600) and $19,400 in Calgary (vs. $25,200).

In other markets, particularly Atlantic Canada, home price growth remained strong. Year-over-year, prices were still up over 37% in Halifax, NS, 30% in Fredericton, NB, and 31% in Saint John, NB.

Here’s a look at select provincial and municipal average house prices, their year-over-year price change and the difference compared to the average price peak in February.

Location Average Price Annual price change Change from February 2022
Nova Scotia $414,100 +37% -1.8%
Quebec $511,265 +14.2% +2.5%
B.C. $1,058,079 +12.1% -4.2%
Ontario $985,354 +13.3% -9.3%
Alberta $465,579 +6% -3.5%
Halifax-Dartmouth $528,100 +37.9% +6.6%
Barrie & District $939,500 +31% -0.1%
Greater Toronto $1,354,000 +30.6% +1%
Victoria $1,003,900 +28.1% +6.3%
Greater Vancouver $1,374,500 +19.8% +4.7%
Greater Montreal $573,100 +17.4% +5%
Calgary $511,600 +17% +5.7%
Ottawa $754,400 +13.5% +3.3%
Winnipeg $351,100 +11.3% +2.5%
St. John’s $296,200 +10.6% +1.1%
Edmonton $371,600 +9.4% +6.5%

Rising interest rates having an effect on the housing market

The Bank of Canada’s steep pace of rate hikes—with more the come—is already having an impact on Canada’s housing market.

“Back-to-back overnight rate hikes in March and April—including an outsized 50 basis-point increase last month—set the stage for a sizable 12.6% drop in home resales across Canada between March and April,” wrote Robert Hogue at RBC Economics.

“We think the sizable drop in activity in April marks a turning point for the Canadian market with further cooling on the way,” he continued. “The Bank of Canada’s setting out to aggressively normalize its monetary policy is a game-changer for the market—turning what has been a tremendous tailwind into a stiff headwind for the market.”

This shift in market dynamics is having a direct impact on sellers, particularly those who bought before selling, noted Scotiabank economist Farah Omran.

“They are now forced to accept offers below what the past two years led them to expect, or offers that contain conditions such as inspections,” she noted. “With largely aggressive asking prices and bids just two months ago, home appraisals on some of the conditional offers are pulling prices down closer to market values.”

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