Weak demand for Canadian real estate continues to push prices lower. Canadian Real Estate Association (CREA) data shows the price of a composite benchmark (typical) home made a sharp downtick in April. The medium-term trend also reveals this is a more complicated issue than just trade war jitters. Over the past few years, buyers have been rejecting price increases at lower and lower levels, indicating more downward pressures are forming.
Canadian Real Estate Prices Continue To See Downward Pressure
The composite benchmark price of existing home resales made through the MLS.
Source: CREA; Better Dwelling.
Canadian real estate prices slipped further last month. The price of a benchmark (typical) home fell 0.7% (-$4,800) to $701,900 in April. This represents a 3.6% (-$26,100) decline from last year, and it’s clear in the chart above that prices have traded a fairly narrow range in recent months. The price of a typical home in Canada was roughly the same price back in 2021.
Canadian Real Estate Price Growth Turns Further Negative
The annual price growth rate for a benchmark home sold across Canada.
Source: CREA; Better Dwelling.
Growth has been decelerating according to the CREA HPI. The 3.6% contraction last month marked the fourth month of consecutive deceleration for the annual growth rate. This was the sharpest annual change since September 2024, rolling back minor progress made at the end of last year.
Canadian Real Estate Prices “Triple Top,” Buyers Rejecting Growth At Lower Levels
Canadian real estate heading lower may come as a surprise considering how much prices have dropped since peaking in 2022. A typical home is 17.6% (-$149,700) lower than the March 2022 record high. CREA’s HPI has now peaked 3 times since the initial correction from the all-time high, establishing lower highs (peaks) each time. This is called a triple top in asset prices, and shows that buyers rejected price increases faster each time.
Canadian real estate prices slipped further last month, and buyers are more hesitant about price increases despite cheaper financing and more leverage. It’s easy to dismiss this as another casualty of the trade war, but that doesn’t explain a 3-year long trend. There’s very real concerns around affordability and value, the latter being a very under-discussed issue. Many of the country’s most expensive cities have seen considerable corrections, like Toronto. However, it’s not clear if the price drop is enough to make it a deal—these cities used to have low unemployment, and presented unique opportunities. Now they barely resemble their pre-2020 reputations, and struggle to compete with more affordable regions poaching top talent.
Still 50 per cent overpriced.
Amen
Amen
Compare to ridiculous inflation on food prices, taxes, insurance premiums, energy cost increases, home goods and all supplies , housing prices are very undervalued@ it is time to buy since it won’t stay like this for a long time. It is a false pricing situation only!
First time I’ve seen anyone make that excellent point at the end, and captured exactly how I feel.
People would have scrambled for a $600k Toronto condo back in 2019, but now few people even care. No one is willing to discuss the vacancy rate and the fact that no one wants to rent any of these places without parking, but that doesn’t mean the problem isn’t very real and getting worse by the day.
Every credit bubble claims its biggest cities, since the youngest workers can’t establish themselves & don’t see a future. This may be Toronto’s 90s Montreal moment, and Calgary may be having its 90s Toronto moment.
Millennials are the dumbest generation we have ever worked with. They left their common sense at the cash register and overpay for everything. Now that prices are reversing. Thousands are going underwater on their mortgages and loans everyday. Here is tip Sherlock, wait buy CHEAP
Feels like some kind of further breakdown in market segments would be useful.
Looking at “starter homes” around Leslieville in Toronto, the last few weeks saw everything on offer get bought up for prices that seem (anecdotally, i guess) a good 15-20% above what they were going for last year. It’s true for the same price you can buy 3 or 4 comparable sized, comparatively brand new semis/town houses in Edmonton… but it seems a lot of people with $1-1.4 million to spend in Toronto are not finding the value Edmonton is offering in that math. Maybe they’re just the greatest fools?
But if it was just that, condos still seem frozen and falling.
In the higher end segment, it feels like the only things really struggling are certain houses newly built in the last 5-10 years, whose current owners all think they’re automatically worth well over $3 million, regardless of location or…any other factor… most likely because these owners overpaid at some point since 2016.
Just to say it seems there’s some kind of greater nuance to be sussed out in whatever’s going on here.
Condo prices need to drop 50% so I can buy two shoeboxes, knockout a wall and have a small downtown apartment…
Take out your MPAC statement and compare the assessed value with the prices of the last two or three sales in your neighborhood. Besides all the work necessary to change the mill rate, why do the “professionals” offer such a disconnect in value? LOL
Risk is starting to assert itself in the credit market. Fewer dumb dollars trying to hop into the palms of the newly arrived & destitute future Canucks. Let’s see how far RE falls.
There’s no permitts for new condo buildings
You will see a shortage again in 3 years especially if Canada allows another 500 000.indians per year here and %90 come to GTA