The steady decline in home prices finally stabilized in the Greater Toronto Area in August, but persisted in other metro housing markets.
The Toronto Regional Real Estate Board (TRREB) reported the first month-over-month increase since prices started falling earlier in the year. The board’s MLS Home Price Index benchmark price has fallen 22% from its peak of $1,376,000 in March.
In August, the benchmark price was $1,079,500, a 2.1% increase from July and up nearly 1% from a year ago. Sales were also up in the month, but are down 34% compared to a year ago.
Home price declines continued in Canada’s other major markets, with the benchmark price falling 2.2% month-over-month in Vancouver, and single-detached properties in Montreal and Ottawa down 4.5% and 7%, respectively.
In Calgary, meanwhile, sales were down modestly by 1.5% compared to July and 0.5% from a year ago, while prices are down 1.5% month-over-month, but remain 11% higher compared to a year ago.
In July, analyst Ben Rabidoux noted that the increase in housing inventory was slowing as new listings started to fall. That trend continued in August, with new listings falling 12.5% month-over-month in Toronto, 16% in Vancouver and 14% in Calgary.
In his latest Edge Realty Analytics newsletter, Rabidoux said there are two takeaways from the current trends. “Sellers are holding off for better market conditions, with some renting their home in the meantime,” he wrote. Additionally, “even with rising rates, there are still no signs of a surge in distressed listings.”
RBC economist Robert Hogue said rising interest rates are “pushing many buyers to the sidelines and reducing the purchasing budget of others.”
“We see the [housing market] downturn intensifying and spreading as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates,” he added.
Here’s a look at the August statistics from some of the country’s largest regional real estate boards:
Greater Toronto Area
- -34% (YoY)
- +11% month-over-month (MoM) *Seasonally adjusted
Average price: $1,079,500
- +0.9% (YoY)
- +2.1% (MoM) *seasonally adjusted
New listings: 10,537
Active listings: 13,305
“Sales represented a higher share of new listings compared to the previous three months. If this trend continues, it could indicate some support for selling prices in the months ahead,” TRREB noted in its report. “While higher borrowing costs have impacted home purchase decisions, existing homeowners nearing mortgage renewal are also facing higher costs.”
Source: Toronto Regional Real Estate Board (TRREB)
Greater Vancouver Area
MLS Home Price Index benchmark price: $1,180,500
New listings: 3,960
Active listings: 9,662
“With inflationary pressure and interest rates on the rise, home buyer and seller activity shifted below our long-term seasonal averages this summer,” said Andrew Lis, REBGV Director, economics and data analytics. “Homebuyers and sellers are taking more time to assess what this changing landscape means for their housing needs.”
Source: Real Estate Board of Greater Vancouver (REBGV)
Montreal Census Metropolitan Area
Home Sales: 2,681
Median Price (single-family detached): $525,000
Average Price (condo): $385,000
New listings: 5,211
Active listings: 13,715
“The magnitude of the increase in mortgage interest rates is beginning to be reflected in a more incisive way, with transactional activity slowing down further and the inventory of properties put up for sale building up,” said Charles Brant, Director of the QPAREB’s Market Analysis Department. “The market’s re-balancing process is therefore underway, albeit in a much more gradual manner than in the other Canadian metropolises, reflected in a shift in the ratio of sales per new listings and a rapid decline in the proportion of sales of properties that were concluded after overbidding.”
Source: Quebec Professional Association of Real Estate Brokers (QPAREB)
Benchmark Price (all housing types): $531,800
New listings: 2,719
Active listings: 4,782
“While higher lending rates have slowed activity in the detached market, we are still seeing homebuyers shift to more affordable options, which is keeping sales activity relatively strong,” said CREB Chief Economist Ann-Marie Lurie. “This makes Calgary different than some of the larger cities in the country, which have recorded significant pullbacks in sales.”
Source: Calgary Real Estate Board (CREB)
Average Price (residential property): $716,354
Average Price (condominium): $425,694
New Listings: 2,338
“August is a traditionally slower month in Ottawa’s resale market ebb and flow cycle due to summer vacations. Compounding the slowdown in market activity, Buyers are uncertain about their purchasing power given impending additional interest rate hikes,” said Ottawa Real Estate Board President Penny Torontow. “The lightning speed at which homes were selling at the start of 2022 is a thing of the past, evidenced by Days on Market (DOMs) inching closer to that 30-day mark.”
Source: Ottawa Real Estate Board (OREB)