Canada’s housing market slump might be slowing down, but home prices are still dropping.
Robert Hogue, assistant chief economist at RBC, recently pointed out that although the decline could be nearing its end, property values are “still clearly coming down.”
The national MLS Home Price Index (HPI) for Canada dropped for the eighth month straight in October. The 1.2 per cent decrease from September was the smallest since May, yet overall prices have fallen 10 per cent since their peak in February.
This drop in home values is being felt all over the country, but some provinces are seeing bigger declines than others, according to Hogue.
After some of the biggest gains during the early pandemic days, several smaller cities in Ontario are now facing some of the largest price losses across Canada.
Between February and October, property prices fell 22 per cent in Cambridge and 18 per cent in both London and Brantford.
Kitchener-Waterloo, Kawartha Lakes, and Hamilton-Burlington have seen their MLS HPI shrink by 17 per cent since peaking this spring.
Canadian Real Estate Association, RBC Economics
Toronto’s decline has been smaller-just 11 per cent-but Hogue expects prices there to keep slipping for now.
Year-over-year home resales in Toronto were down by nearly half (49.3%) in October, while new listings dropped by 11.5 per cent.
“The market downturn may be in a late stage but it doesn’t mean things are about to heat up again,” Hogue said.
“We expect high- and still-rising-interest rates will continue to challenge buyers for some time. This will keep activity quiet for a while longer even if it stabilizes near current levels. We think benchmark prices will keep trending lower until spring.”
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