forma condos.House prices plunged by 170000 in 8 months! The Canadian Real Estate Association (Canadian Real Estate Association) released the latest data showing that home sales totaled 35380 units in October, up 1.3 per cent from September but down 36 per cent from a year earlier.Please Visit: forma condos to Get Your VVIP Registration Today!
The national average selling price of homes sold in October was C $644643, down 9.9 per cent from the same period last year.
Compared with the peak of C $816720 in February 2022, the decline is about C $170000.
Despite the first month-on-month increase in home sales since February, the property market has not rebounded sharply, according to several real estate industry observers.
The average selling price has fallen by more than 20 per cent since February, with prices falling in almost all markets across the country and flat in a few markets.
However, CREA says the average selling price can be misleading because it is easily distorted by sales in large, expensive markets such as Toronto and Vancouver.
So the agency promotes another data, known as the “house price index” (House price Index), as a better measure of the overall market.
It is reported that HPI in October fell 1.2 per cent to C $756200, the smallest decline since June, but down 8.2 per cent from six months ago, according to CREA.
Although house prices have fallen from their peak, interest rates are rising, so the loan burden is not lighter.
“the Canadian real estate market will continue to experience ups and downs in October,” Robert Kavcic, senior economist at Bank of Montreal Capital Markets (BMO Capital Markets), said in a report to investors.
Although sales in 60 per cent of the local market rose month-on-month, with the greater Vancouver area alone growing by 6 per cent, Robert noted that last month’s sales activity was still below the low end of COVID-19 ‘s pre-epidemic standards.
Robert said it was even the coldest October since the economy emerged from recession in 2010.
Rishi Sondhi of TD Economics has a similar view.
“sales have fallen sharply by more than 40 per cent since February, close to 2012 levels and appear to be below fundamental factors such as income and housing supply,” Rishi wrote in a report to investors.
In addition, both Rishi and Robert blamed interest rates and mortgage rates for the slowdown.
They also agree that downward pressure on house prices will continue into next year, as mortgage rates have broken through 5% and are likely to rise further.
Rishi expects average house prices to fall back to about half of what they rose during the outbreak, but warned that supply levels were a key risk predicted by TD.
“homeowners are feeling the pressure as higher interest rates lead to an increase in monthly payments, and some may be forced to put their properties up for sale (although so far, the level of new supply entering the market each month is still low).”
“if enough of these homeowners end up putting their homes up for sale, the downward pressure on prices may exceed our expectations.”
In recent months, the Bank of Canada has been raising interest rates and mortgage rates to combat inflation not seen in decades.
This suppresses the purchasing power of consumers, coupled with the low number of new listings, many buyers are waiting for house prices to fall further.
At the same time, many sellers refuse to sell unless they need to move because they realize that prices are not as high as they were at the beginning of the year.