Canadian home prices fall 12 per cent in November from 2021, CREA says

By
Millicent Wong
-
0
389
Finance post top stories banner

  1. property
  2. news

According to CREA, sales fell by 38.9% from the record level set in November 2021

Sale sign in front of the house Rising interest rates have cooled just as home sales and prices have been scorching hot across Canada. Photo by Mike Hensen /The London Free Press/Postmedia Network

Benchmark home prices fell 1.4 percent mom and sales volume 3.3 percent in November in November as housing markets continued to feel the slowdown from rising interest rates, data released Thursday by the Canadian Real Estate Association showed became.

This ad has not yet loaded, but your article continues below.

According to CREA figures, 60 percent of domestic markets saw lower sales in November, led by declines of 15.3 percent in Greater Vancouver, 13.8 percent in Victoria, 12.1 percent in Ontario’s Niagara region and 11.9 percent in Regina.

By clicking the subscribe button, you agree to receive the above newsletter from Postmedia Network Inc. You can unsubscribe at any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

“November housing data came in as expected from across Canada – still fairly quiet – and that’s unlikely to improve this winter as the Bank of Canada hiked rates again last week,” said Shaun Cathcart, CREA’s senior economist. in the report. “It will be interesting to see what buyers do when listings start to appear in large numbers in the spring, and even more interesting to see what happens a little later when the Bank of Canada, now widely believed to be on or is very close to the start of its tightening cycle, which will eventually begin to cut rates.”

This ad has not yet loaded, but your article continues below.

The MLS Home Price Index was down 4.4 percent from November 2021, and actual average prices were down 12 percent year-on-year to $632,802 in November — down 1.8 percent from October.

The monthly sales decline wiped out a small gain from October, while annualized transactions fell 38.9 percent from a record November 2021.

Although domestic transactions have fallen sharply, Bank of Montreal economist Robert Kavcic said the current market is the most buyer-friendly since 2012.

“Nonetheless, the market balance continued to weaken during the month, with the sales to new listings ratio falling to 49.9 percent in November,” Kavcic said in a note to clients. “This is the most buyer-friendly level since 2012 and leaves the market in weaker conditions than in 2017-18.”

This ad has not yet loaded, but your article continues below.

Toronto real estate agent Cailey Heaps believes national sales have declined largely because buyers are risk-averse.

“I call it the fear of making a mistake,” Heaps said in an interview. “Prospective buyers think if they buy now, what will people think when the market goes down? You could have bought the same house in six months for less money, or is now the right time to enter the market?”

Heaps goes on to explain that the current buyer’s mindset appears to be focused on getting someone else to express interest in their preferred property before they’re ready to bid.

  1. Average rent in Canada is recovering above $2,000 – up $224 year-on-year

  2. People pass by a large Christmas tree while shopping at a mall in Ottawa on Christmas Eve in 2020.

    Mall owners are betting they can save brick-and-mortar retail by being more like Amazon

  3. The interest rate at which borrowers must qualify for a mortgage has risen to eight percent.

    Why the mortgage stress test is likely to continue even if qualifying rates hit 8%

This ad has not yet loaded, but your article continues below.

“You’re afraid to bet. You need external confirmation. When someone else expresses interest and registers an offer, they’re ready to step in. So it seems he has lost confidence in his decision making and whether this is the right time to enter the market.”

Despite fewer listings and buyers in the market, Heaps believes we are in a period of stabilization.

“The downward pressure on pricing appears to have stopped and sales volume has declined slightly, but not drastically — and we know interest rates are likely to remain where they are now for a long time,” she said. “All of these factors suggest that we are in a period of stabilization.”

She added that prices are not expected to rise for nine to 18 months.

• Email: [email protected]

This ad has not yet loaded, but your article continues below.

Comments

Postmedia strives to maintain a lively but civilized discussion forum and encourages all readers to share their opinions on our articles. Comments may take up to an hour to be moderated before they appear on the site. We ask that you keep your comments relevant and respectful. We’ve turned on email notifications – you’ll now receive an email when you get a reply to your comment, there’s an update on a comment thread you follow, or when a user you follow comments follows. For more information and details on how to customize your email settings, see our Community Guidelines.