According to the Canadian Real Estate Association’s (CREA) newest statistics, August has seen a softening of sales for the 6th month in a row across the country. Although the MLS Home Price Index dipped down 1.6% since July 2022, it is still elevated 7.1% compared with August 2021. August’s slow down was the smallest of the past 6 months’ decline, assisted by creeping interest rates that continues to moderate home sales & prices.
Across Canada, gains were only seen in specific markets in Ontario, while a cooling effect was seen in the rest of Ontario, Greater Vancouver, Calgary, Edmonton, Winnipeg, and Halifax – welcome news to many looking to enter the market.
CREA’s Chairperson Jill Oudil weighed in with her observation, “August saw national sales hold steady month-to-month for the first time since February, which, along with a stabilization of demand/supply conditions in housing markets across Canada may have mostly run its course.” She concludes, “That said, some buyers may choose to remain on the sidelines until they see clearer signs of borrowing costs and prices also stabilizing. As the market continues to evolve, your best bet is to contact your local realtor for information and guidance about how to navigate this rapidly changing environment.”
Likewise, CREA’s Senior Economist Shaun Cathcart questions where the OSFI (Office of the Superintendent of Financial Institutions) should take the stress test in future. It is clear that many Canadians were protected by it as interest rates were raised 300 base points within the previous five months, “But should there not be a flipside to the coin? The overnight rate is now officially above the Bank of Canada’s “neutral” range and not expected to go too much higher,” Shaun stated. “This is not about “looser” or “tighter”, it is about what is appropriate given where rates are and where they are likely to go moving forward. OSFI is likely thinking hard about what makes sense given the new realities, and how to balance the community of interests they are tasked with securing.”
Nationally, the actual (as opposed to seasonally adjusted) national average home price was $637,673 as of August 2022. This has dipped slightly down 3.9% from the same time last year. This national average home price is greatly swayed by home sales in Greater Vancouver and the Greater Toronto Area. When one adjusts for these markets, the Canadian average price for a home plummets by $114,800 to a mean of $522,873.
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