Canadian Real Estate Prices Just Made A Record Price Drop: Teranet-National Bank

Canadian real estate is making an epic dive according to land registry data. The TeranetNational Bank of Canada House Price Index (HPI) showed a big drop in home prices in August. The index, while conceptually similar to CREA’s HPI, is based on land registry data. That makes it more accurate, as well as comprehensive since it includes all transactions. Teranet-National Bank’s HPI showed the largest price drop in the index, which goes back even further than CREA’s index. 

Canadian Real Estate Prices Just Made The Largest Drop Ever

Canadian real estate prices made the largest drop in the history of the HPI. The 11-City HPI fell 2.4% in August, and is down 4.06% from the peak in May 2022. The index hasn’t seen such a substantial monthly drop in the data series, which goes back to 1999.  

Canadian Real Estate Price Growth

The annual percent change of Canadian real estate prices for a basket of 11 major markets across the country.

Source: Teranet-National Bank of Canada; Better Dwelling.

Only Prairie Markets Saw Prices Increase

Major markets that saw prices increase were limited to more affordable regions. By which, we mean Alberta — that didn’t see a boom with the rest of the market. Calgary (+1.3%) and Edmonton (+2.7%) were the two major markets to see growth in Western Canada. 

Southern Ontario and Halifax Are The Worst Performing Markets

Negative growth was observed in most markets. National Bank observed the biggest hits in Hamilton (-5.83%), Ottawa-Gatineau (-3.1%), Halifax (-3.6%) and Toronto (-4.0%). It wasn’t at any particular extreme, but Vancouver (-2.0%) fell along with most of BC’s real estate markets.

Canadian real estate is adjusting to a life of higher interest rates, but not nearly as fast as one would think. Mortgage pre-approvals are believed to be propping up buying power, providing lower rates secured up to four months prior. As interest rates hold higher levels for longer, the market is expected to continue adjusting to a higher capital cost.

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  • Average Man 2 months ago

    Siri, play “Bodies” by Drowning Pool.

  • Kerry 2 months ago

    Typo- Ottawa’s drop was 3.8 rather than 3.1.

  • Ike 2 months ago

    Houses are still unaffordable but rent had skyrocketed.

    This is just awesome?

    • JT Dawg 2 months ago

      Condo Speculords went from negative $300 per month cash flow soon to be negative $600+ per month (due to increased costs) and can now offset higher interest rates with an extra $50 per month more rent than previous peak rents. AWESOME! lol Besides, rents are already beginning to wane! Why buy a house when you can lease one for thousands less per month than the cost to carry it all the while your landlord is bleeding to death in negative cash flow in hopes that there will be future capital gains.

  • Chris 2 months ago

    It’s just like cleaning up your diet after you’ve binged on junk food for over two years. All the weight’s not going to disappear overnight. Further drops will happen, especially when the last of the prequalified cheapo mortgage rates expire soon.

    During the crazy times, I had mortgage brokers looking to throw multi million dollar mortgages at me. What would I qualify for at today’s stress test rates? Not even a mil. There goes your real estate bubble.

  • Yoroshiku 2 months ago

    There’s an unremarkable, unrenovated 1980s brick house on my street that has been sitting on the market for 2+ months now. $2.4M. Every weekend there’s an open house. A few people wander through. I keep thinking, “Lower the price, dudes!” A lot of sellers are in denial about what’s happening.

  • Sattar 2 months ago

    In 2011 my mom used to ask me are all these houses occupied…. I answered doesn’t look like it, since then for sale signs filled the neighborhood, theyre investment houses meant to hold the value of money… They’re all for sale again.

  • Holly 2 months ago

    Yes…let it drop! It’s about time!

  • Shorswill 2 months ago

    Minus 3.6 percent in Halifax. Wish my stock portfolio only fell that much! But if I was looking to buy I would sit and watch to spring 2023 to see where this settles out.

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