Canadian home prices fall 6% in April, down for 2nd month in a row
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Loading... - Kirsty Duke
- 26 May 2022
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Canadian home prices fell six per cent to $746,000 in April, as higher interest rates poured cold water on a red-hot real estate market.
Home sales fell 12 per cent nationally in April, with the biggest drops seen in big cities like Toronto, the Canadian Real Estate Association said Monday.
Prices peaked at a record high of more than $816,000 in February this year and average home prices have now declined for two months in a row. In March, the average price stood at $796,000, before falling another six per cent in April, which is typically a strong month for the housing market.
"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 statement.
CREA says the average selling price can be misleading because it is easily skewed by expensive and numerous sales in big cities like Toronto and Vancouver. It highlights a different number called the House Price Index (HPI) as a better gauge of the market because it adjusts for the volume and type of homes sold.
The HPI shrank by 0.6 per cent in April, the first monthly decline in two years.
While prices are down from their recent peak, they remain up by about seven per cent from where they were a year ago.
Still, the numbers paint a picture of a housing market cooling from its feverish activity just a few months ago. While the numbers revealed Monday are national in scope, the national average is being dragged down by Toronto, where average selling prices are down by about $80,000 since March.
Realtor Daniel Foch says it's not yet a buyer's market, but things are showing signs of heading that way. For now, it's what he calls a "beauty pageant market."
"If a product really stands out and it's underpriced, it will attract a lot of the buyers from that price range. But you're not seeing it across every single [property]," he said in an interview.
While he doesn't expect a major correction because there are still many well-financed buyers eager to get in, he has heard of cases of buyers trying to back out of expensive deals they committed to earlier this year.
"The challenge is if you default on the transaction and the seller wants that money, you're still going to be held liable for that difference anyway. So in most cases, unfortunately, you're best off to honour the contract because at least you end up with the house," he said. Read More…
