Canada’s average home price slides to $746,000, sales plummet amid rising rates
Stephanie Hughes
The Vancouver Sun
Sales fell across 80% of local markets.
Home prices across Canada appear to be slipping under the weight of rising interest rates, with the nationwide average home price falling to $746,000 in April, down 6.3 per cent from March’s average of $796,000, according to data from the Canadian Real Estate Association.
The organization’s benchmark home price index — a metric designed to create an “apples-to-apples” comparison of typical home sales over time — also posted a decline of 0.6 per cent month-over-month, the first such decline since April 2020, CREA noted.
Sales volumes dropped precipitously as well, falling 12.6 per cent month-over-month and 25.7 per cent since a record April last year. While the decline was largely led by the Greater Toronto Area market, sales fell across 80 per cent of local markets.
“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,” CREA chair Jill Oudil said in a press release.
While prices slipped from March to April, the association noted that the average price was still up more than seven per cent over the same month last year and the benchmark price was still up 23.8 per cent year-over-year.
CREA senior economist Shaun Cathcart said this month’s data was less a reflection on the moves the Bank of Canada has already made and more about the sentiment around how far the central bank is prepared to go to tamp down inflation.
“After 12 years of ‘higher interest rates are just around the corner’ here they are,” Cathcart said in a release. “But it’s less about what the Bank of Canada has done so far. It’s about a pretty steep pace of continued tightening that markets expect to play out over the balance of the year, because that is already being factored into fixed mortgage rates.”
Despite the drop in demand reflected in CREA’s numbers, a shortage of supply across the country is keeping some upward pressures on prices.
A second set of figures released Monday, however, suggests some relief on the supply front may be on the way, as the pace of homebuilding began to pick up in many of the country’s markets.
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