Canadian Real Estate Markets Saw Prices Rise Up To $42k In A Month

Canada’s credit-crazy real estate buyers have flooded the market once again. Canadian Real Estate Association (CREA) data shows a benchmark, or typical, home rose in March 2023. Breaking the data down by market, most saw substantial increases. One market even saw prices rip over $40k higher over a span of just 31 days. 

Canadian Real Estate Prices Are Falling In Just 1 In 5 Markets

We already discussed the national price climbing last week, and most regions are seeing growth. Only 12 of the 61 benchmark home price indexes didn’t see growth in March. Of those, one showed no movement (Guelph), and the other 11 reflected losses. Higher rates went from throttling every major market to just 1 in 5 benchmark indexes showing falling home prices. 

About half of the markets posting a decline were located in the province of Ontario. Not a total surprise, considering it was running extremely hot over the past few years. Kingston showed the largest decline when it came to the rate and dollar value, with a typical home falling 2.9% (-$15,800) in March. 

Canadian Home Prices Rose In 80% of Major Real Estate Markets

The other 4 in 5 market indexes showed substantial growth. The fastest rising rates were in Sudbury (+5.6%), North Bay (+5.1%), and Maurice (+4.7%)—in that order. The first two are located in Ontario, and the last is in Eastern Quebec. We had to look it up, but with monthly prices rising over $10k in a month—it might just be us. 

A Small City In Ontario Is Seeing Exuberant Growth 

When it comes to dollar terms, the most expensive markets continue to top the list. The largest dollar growth was observed in Oakville, where prices climbed 3.3% (+$42,300) in March. Greater Toronto followed with a 2.5% (+$27,200) increase. A little more surprising is Sudbury was in third, logging 5.6% (+$22,300) growth. A typical home in Oakville is more than 3x that of Sudbury, so the dollar increase of nearly half is really a spectacle to behold. It’s a lot of capital sinking into a distant university town.  

Canadian real estate prices are generally moving higher, with just a few exceptions. Affordability issues don’t seem to be slowing down price growth, and that’s likely due to the type of buyer. Investors began dominating as the country flooded the market with cheap money and moral hazard. Investors were buying at such a scale that even bank executives warned they had displaced end-users

Rising interest rates helped to throttle investors from scooping up everything. However, less than a year later the country is demonstrating it doesn’t have much else. Borrowing costs are retreating and new demand-stimulus has been delivered by the policymakers

Home sales have yet to recover, but adding another layer of moral hazard is likely emboldening investors once again.

8 Comments

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  • Ray 1 year ago

    Wow that’s amazing, who’s buying these homes. Many are crying because they’re not able to get mortgages from the banks. Even the mortgage brokers who are good at manipulating paperwork aren’t even able to get mortgages for anybody.

  • GEORGE 1 year ago

    BAN RESIDENTIAL REAL ESTATE INVESTING!!!

    • Patiently Waiting 1 year ago

      Agreed. Or this will never end. My kids in their early 20’s are already looking to leave Canada. My parents came here in the 60’s for a better life. They got one and so did we but are kids are suffering. I think what makes me the most upset is the Gov is pretending to care and want to help. Disgraceful.

    • Robert Masson 1 year ago

      Absolutely! Greed demolishes real estate affordability. Every money manager, financial advisor, banker,investor etc recommends REIT’s. Connecting the dots is pretty easy.

  • kay carlson 1 year ago

    Ban Residential Real Estate Investing would be too easy a solution, then again the big guys, (money Laundering) may complain,

  • David Todtman 1 year ago

    This reflects the utter failure of capitalism and its market system to provide what average people need.

    Even luminaries such as Nouriel Roubini know this: “Karl Marx had it right. At some point capitalism can destroy itself.” (WSJ, Aug 13, 2011)

    This may not be that final point, but every point adds up to a tipping point. In the social domain of political economy, that point is revolution.

  • Justin Miron 1 year ago

    Are they eating?

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