Langstaff Gateway Condos project.Canadian house prices fell 13% that month! The Canadian real estate market continues to cool, with the average selling price of Canadian homes falling by more than C $100000 in the past three months to C $711000 in May.Please Visit: Langstaff Gateway Condos project to Get Your VVIP Registration Today!
While May is usually a strong month for home sales, the Canadian Real Estate Association (CREA) said on Wednesday that home sales fell sharply, down 20 per cent compared with the same period last year.
As the pandemic spread, Canada’s real estate market rebounded strongly, with prices and sales hitting record highs for most of the past two years.
But that momentum has changed significantly in recent months as lending rates cut in the early stages of the pandemic began to rise making mortgages more expensive and reducing the purchasing power of buyers.
CREA says the average price of a house sold in Canada last month was C $711000. This is down more than 13% from the all-time high of C $816720 set in February 2022.
If the economy goes up, according to RBC’s upside forecast, house prices will soar and will not be affected by the rise in interest rates.
The benchmark average price of housing is expected to rise 10.9% in April 2023 compared with the same period last year. Over the next four years, the average compound annual growth rate was 9.5%, and house prices rose by 61.7% in five years.
For example, based on the current benchmark average price of housing, the benchmark average price of a home fell to 978600 (+ $96200) by April 2023. By April 2027, the price of the house had fallen to 1.4069 million (+ $524469). At that time, house prices across Canada will be roughly equivalent to the current prices in Vancouver.
No matter what happens in the future, RBC’s recent economic reports have always spoken bluntly about the impact of rising house prices on the economy, and now put considerable weight on downside risks in economic forecasts.
High housing prices should indeed be adjusted, but at present we should pay more attention to the economic situation behind high housing prices to avoid the financial crisis.