Union city condos.Canadian house prices fell the most in 17 years. The latest data released by the Canadian Real Estate Association (CREA) on July 15, local time, are under pressure to raise interest rates.Please Visit: Union city condos to Get Your VVIP Registration Today!
Average house prices and sales in Canada continued to fall during June, falling to their lowest level in nearly a year. Canadian house prices fell by the sharpest since records began in 2005 in June, according to the MLS (Multiple Listing Service) house price index.
On June 1 this year, Canada announced a 50 basis point increase in interest rates, raising the policy rate to 1.5%. On July 13th, the Canadian central bank raised interest rates by another 100 basis points, or caused more potential home buyers to give up their purchase plans.
Home sales fell 5.6 per cent to 40107 units in June compared with May, while average house prices fell 5.9 per cent to 666000 Canadian dollars (3.46 million yuan), according to the data. it has plummeted 23.9% from its peak just four months ago, the average house price in February. The MLS composite house price index, which eliminates quarterly impact, fluctuates little and is relatively slow to respond to the latest data, also fell nearly 2%, to an average of 807000 Canadian dollars (4.19 million yuan).
Before the outbreak, house prices in Canada remained relatively stable for several years. Since the outbreak, Canadian house prices have soared 60 per cent until just a few months ago, when one of Canada’s main economic concerns was that the housing market was “overheated”, fuelling national inflation.
The Bank of Canada raised its policy interest rate from 1% to 1.5% on June 1, but in the face of a 40-year high of inflation in May, the central bank again announced a 1% increase in interest rates on July 13 in an attempt to control inflation as soon as possible. the impact of the sharp interest rate hike on July 13 may emerge in the coming months.
The Canadian Real Estate Association pointed out that in addition to the direct impact of higher interest rates and higher loan costs on cooling the real estate market, expectations of an interest rate hike by the Bank of Canada have indirectly cooled the real estate market “ahead of time”.
Itemized data show that the biggest decline in house prices in June was in single-story buildings, while apartments were the most stable.
According to the Canadian Real Estate Association, property sales in British Columbia, the province with the highest Chinese share, will face the biggest decline in Canada, falling by 26.6% in 2022. Canada’s national sales are expected to fall by 14.7% in 2022.
The most intuitive figure for the sharp drop in demand is the ratio of sales to new listings: the ratio has fallen to 51.9 per cent, which means that on average only one out of every two listed homes has been successfully sold; this is the lowest since the ratio was calculated in 2017. This has led to the fastest growth in Canadian property inventories since the outbreak began, with homes increasingly unsold.