yonge city square condos.Canadian house prices fell in 2023. Robert Hogg, assistant chief economist at RBC Bank of Canada, said in a report released on Thursday that the residential real estate market could peak this spring as the Bank of Canada’s rate-raising cycle dampens market activity and slows prices.Please Visit: yonge city square condos to Get Your VVIP Registration Today!
Hogg: “We now expect resale activity to slow faster than previously expected, and perhaps more importantly, as market sentiment worsens due to extreme bullish sentiment, we expect prices to peak this spring.”
“in this changing environment, the local market is likely to undergo a moderate price adjustment, partly reversing the huge gains recorded over the past year.”
According to the Canadian Real Estate Association, the non-seasonally adjusted average house price in March was C $796000, up 11.2 per cent from a year earlier. However, this is moderated from the record C $816720 set a month ago.
Home sales also slowed in march, down 16.3% from the historical record set a year ago.
Mr Hogg said he expected these trends to continue, although he noted that the rapid rise in prices so far this year could still lead to higher annual prices than they were a year ago.
Overall, Mr Hogg says, national benchmark prices are likely to fall by nearly 5 per cent every quarter from peak to trough. Home sales are expected to fall by 13% this year and a further 14% by 2023.
Due to a strong start to the year, average prices will not fall in 2022, and RBC expects total prices to rise 8.1 per cent this year and then fall 2.2 per cent in 2023.
Hogg expects the price decline to be geographically uneven, with greater price pressure in markets such as Vancouver and Toronto.
Because of the recent increase in fixed-rate mortgages, potential buyers who have flocked to floating-rate mortgages cannot escape, Mr. Hogg said. Canadians are increasingly flocking to floating-rate loans, which now account for more than half of all new mortgage issuance.
Interest rates on fixed mortgages have risen sharply. So far, the impact on mortgages has weakened as borrowers turn to floating-rate mortgages, whose interest rates are still very low. But the Bank of Canada’s rate hike will soon also make floating rates more expensive, leaving borrowers with nowhere to run.
