mondrian condos in calgary.House prices in Canada fell 6% in April! The average selling price of Canadian homes fell 6 per cent from March to $746000, but was still up 7.4 per cent from the same period a year ago. Economists predict that house prices in hot areas such as Toronto will fall by 10% to 20% in the second half of this year as the central bank of Canada continues to raise interest rates sharply in June.Please Visit: mondrian condos in calgary to Get Your VVIP Registration Today!
Average house prices across the country are largely affected by sales in the Greater Vancouver and Greater Toronto areas, which are the most active and expensive housing markets in Canada.
If these two markets are excluded from the calculation of April 2022, the national average price will fall by $138000.
National home sales fell 12.6% in April, with the biggest drop in the greater Toronto area, according to the Canadian Real Estate Association (CREA). Home sales fell 25.7% in April compared with last year.
“after record years, the property market in many parts of Canada has cooled sharply in the past two months, related to soaring interest rates and buyer fatigue,” Jill Oudil, chairman of CREA, said in a statement.
For buyers, this slowdown could mean more time to consider options in the market. For sellers, this may require a return to more traditional marketing strategies. Of course, there are significant regional differences. ”
Shaun Cathcart, senior economist at CREA, said: “the market expects to continue to tighten policy at a fairly rapid pace for the rest of the year, and fixed mortgage rates have taken this into account. It is for this reason that these numbers have been rising since the beginning of 2021, so why has the market not reacted significantly until now? This may be because the typical five-year fixed interest rate rises from a low range of 3% to a low range of 4% in a month’s time. The stress test is 5.25% or the higher level of contract interest rate plus 2%.
For fixed-rate borrowers, the stress test has just risen from 5.25% to 6%, close to an increase of 1% a month! The actions of the Bank of Canada will also begin to affect floating rates. ”
House prices nationwide hit a record $816000 in February and have fallen for two months in a row. The average price was $796000 in March and fell another 6% in April, which is usually a strong month for the real estate market.
CREA says the average price figure can be misleading because high house prices and sales in big cities such as Toronto and Vancouver can easily distort averages. The association highlights another data called the House Price Index (House Price Index,HPI), which is adjusted according to the number and type of homes sold, so it can better measure the market.
HPI fell 0.6% to $866700 in April, the first monthly decline in nearly two years. On a year-on-year basis, HPI still rose 23.8 per cent in April from a year earlier.
Borrowing costs have doubled over the past year, causing the market to slow. Mortgage rates are expected to rise, the Bank of Canada (Bank of Canada) in response to runaway inflation, the next rate announcement is scheduled for June 1, the market is expected to raise interest rates by 50 basis points.
Analysts expect higher borrowing costs to lead to sharp falls in house prices in some of the hottest markets, such as southern Ontario cities and the suburbs of Toronto.
Rishi Sondhi, an economist at TD Bank in Toronto, expects national average house prices to fall by double digits between March and December this year. Robert Kavcic, a senior economist at BMO, expects the house price index to fall by 10 to 20 per cent in some areas.
“when we talk about housing market adjustment, it’s not a question of whether or not to adjust, but where, how much and for how long,” Kavcic said in a research note. “Ontario’s suburban markets look the most unstable.”
House prices in these areas have begun to fall. From March to April, the seasonally adjusted Oakville-Milton house price index fell 5.6 per cent, while London, Ontario, fell 4 per cent and Cambridge fell 3.9 per cent, according to CREA.
The real estate agent described the sudden change in the buyer’s mood. Some houses have not received any quotations and have been idle on the market for more than a month. This is in sharp contrast to the two years before the epidemic, when dozens of people offered to buy houses, and the transaction price was hundreds of thousands of yuan higher than the listing price.
Phil Soper, chief executive of Royal LePage real estate brokerage, said: “the widespread real estate boom is clearly fading. The bidding war is easing and prices are beginning to level off. ”
“when the market rises excessively, as it has in the past two years, it corrects.” He said it is too early to say that the market has completely shifted to the buyer’s market, as sellers have received multiple offers as well as unsold houses.
Cailey Heaps, a broker who has been selling houses in Toronto for more than 20 years, said the house still received several bids above the list price, but did not experience the frenzy of the first few months of this year.
CREA said most of the country was in a so-called balanced market for the first time since the economy reopened in June 2020. From March to April this year, the number of newly listed homes fell, and so did demand from buyers.
Even if house prices fall 20 per cent in the second half of this year, their value will still be higher than they were before the outbreak, the report said. Since January 2020, the national house price index has risen by 52.2%. Compared with April last year, the house price index rose by 23.8%.