Canadian housing market Correction ended the year with its first year-over-year decline for the quarter House prices According to a new report from Royal Lepage,
But the brokerage is also arguing in a report released on Friday that the “headline-grabbing” decline through 2022 has been overblown in some cases.
The latest National Housing Report from Royal LePage showed the total price of a home in the fourth quarter of 2022 was $757,100, down 2.8 percent from the same months a year ago.
According to the brokerage, this marks the first year-over-year decline in home prices for any quarter since 2008, when the housing market in Canada suffered a severe downturn during the global financial crisis.
The report showed that the decline was even sharper in some Canadian markets.
Royal LePage’s 2022 Q4 Housing Report shows that overall home prices were down year-over-year for most markets in Q4.
In the Greater Toronto Area, total home prices in Q4 were $1,068,500, down 4.6 per cent annually. Meanwhile, in the Greater Vancouver area, prices saw a 3.5 per cent year-over-year drop to $1,208,900.
Some markets, including Calgary and Montreal, saw modest price increases in the fourth quarter.
Single-family homes were down 3.7 percent in the quarter, while condo prices were down 1.4 percent annually.
On a quarter-over-quarter basis, Royal LePage said national total home prices continued to decline for a third straight year, but the 2.3 percent drop in Q4 was the smallest decline ever.
Since March 2022, the Bank of Canada’s rising interest rates have sharply cooled housing markets across the country, following a flurry of activity during the recession. COVID-19 Epidemic.
The most recent data from the Canadian Real Estate Association (CREA) shows the average, non-seasonally adjusted home price has declined by 19 per cent since its peak in February 2022.
But Royal Lepage also sought to put some of the decline in prices into wider context.
The brokerage notes that 0.68 percent of all homes in Canada were sold during the high point of prices in February and March — limiting the real exposure most homeowners should have had at the peak.
Royal LePage also says the market for some Canadian cities and property types was set to peak in 2022, with the high mark for condos coming “much later in the year.”
The brokerage put the “modest” fourth quarter decline into perspective, noting that prices were “close to their peak” in Q4 2021; Overall prices also remained above pre-pandemic levels for the fourth quarter.
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“It may grab headlines to say that prices are below double digits, yet less than one per cent property owners completed their purchases in February or March last year, when the pandemic-induced urgency to buy and dire housing supply The reduction came simultaneously to the eventual increase in prices, LePage CEO Phil Soper said in a release accompanying the report.
Royal Lepage said in a separate report at the end of last year It expects house prices to decline marginally by a further one per cent in 2023.
Other market watchers, including economists at TD Bank and RBC, have called for house prices to ease in early 2023.
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Soper said he expects activity to resume once interest rates stabilize and buyers return to the market, given continued demand from Canada’s growing population and the “widespread shortage of homes.”
Before long, he expects home prices to reverse their 2022 decline as those who put off plans to buy and new entrants in the market push up prices.
“Many sidelined buyers have been waiting patiently for a bottom to appear. Once interest rates stabilize and consumers adjust to their new normal, many of today’s buyers will return – many sooner than later. Analysts are predicting,” Soper said.
“While we do not expect the same level of frenetic demand seen at the height of the pandemic, new home construction by Millennials and older Gen-Xers, as well as hundreds of thousands of newcomers, will put pricing pressure on our limited supply. available house.
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