Canadian real estate sellers who thought the market was stabilizing may soon realize they’re just in the eye of the storm. Canadian Real Estate Association (CREA) data shows the composite benchmark HPI fell in June. The recent declines have been getting larger in recent months, as the price of a typical home in Canada fell to a 4-year low.
Canadian Real Estate Prices Fell To A 4-Year Low
Canadian real estate prices: CREA composite benchmark HPI.
Source: CREA; Better Dwelling.
Canadian real estate prices are heading even lower. The price of a composite benchmark (typical) home fell 0.2% (-$1,600) to $698,600 in June. It represents a decline of 3.6% (-$25,600) when compared to the same time last year. The cost of a typical home across Canada has now rolled back almost 4-years, hitting the lowest level since April 2021.
Canadian Real Estate Price Drops Are Getting Larger
Canadian real estate losses are accelerating once again. Not only was June’s monthly drop bigger than May, the 12-month change has seen losses accelerate for 7 consecutive months and are now falling at the fastest rate since September 2024. There was some uncertainty over where prices would go in this environment, with indicators somewhat stagnant in recent months. Heading lower may be the direction the market has just embraced.
Canadian Home Price Down 18% From Peak, Still Up 28% From 2019
The typical home price has come down significantly, but they do have room to come down further. Since hitting a record high back in February 2022, prices have dropped 17.8% (-$148,800). A significant drop, but they’re still up 26.7% (+$145,000) since the end of 2019, a considerable jump over the period.
It’s also worth noting that last month’s benchmark is lower than the one initially reported in December 2019. Behind the difference in reporting is a methodology shift, which includes giving more weight to condo apartments. In dollar-terms, the house that was slightly expensive back in 2019, was likely larger and in a better location.
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To your point: Peak reported in CREA HPI $868,200. Down 20%, which is coincidentally the amount that would mean all equity was wiped out on many mortgages and the paper backing them is useless. Obviously that can’t be!
Where are these cheaper houses everyone is talking about because I don’t see them anywhere? Prices are higher in many parts I’ve been watching.
The price drops are due in part to the zoning regulation changes, since a house on Dec 31 before zoning changes might be worth $2m and might sell for $2 million on Jan 31st post-zoning changes, but from an appraisal standpoint the house is now worth 1/4.
To further Mortgage Guy’s point, that’s why everyone is scrambling to do broad upzoning. Realistically it solves a very minor problem for housing needs, but games valuation for asset-securitization.
Those $2,300/month 260 sqft apartment rentals the gov considered the model for affordable middle age households will definitely fix this. haha.
Does anyone still believe CREA? They’re worse than the gov when it comes to data since they don’t just have an incentive to cook the books, they also have no accountability.
Bond rates are now rising quickly 20 points or so in last 2 weeks. Interest rates will follow. This will help sales no doubt. Hang on for the ride down
PACK YOUR BOXES KIDDOS
THE BANKS ARE KNOCKING ON YOUR DOORS
lol who in the hell would buy a home in the US?
I have been self employed for almost 50 years. I discovered a long time ago that governments and businesses lie whenever reality is the opposite of what they want. CREA has a vested interest is talking up the real estate market to keep people buying and real estate agents making commissions. In this type of bad market you have to be very suspicious of their figures. I can guarantee you things are worse than they are telling us.