Canadian Real Estate Weakness Is Mostly Just Ontario & Nova Scotia

Canadian real estate prices are declining, but agents across the country don’t quite agree. Canadian Real Estate Association (CREA) data shows the price of a composite benchmark (“typical”) home fell in May, pushing annual growth lower. The national data paints a picture of markets cooling, but most markets saw price growth last month outside of two provinces. Price declines in Ontario and Nova Scotia were so large they pushed the whole index lower. 

Canadian Real Estate Prices Are Falling… Or Rising. Who’s Asking?

Canadian real estate prices fell last month. The benchmark price of a home slipped 0.1% (-$800) to $733,300 in May, driving annual growth to 2.4% (-$18,100) lower. A monthly drop and larger annual contraction paints a picture of price drops across the country—especially to policymakers.   

Many in the industry argue things are fine in other markets, and there’s data to support it.

Canadian Real Estate Prices Climbed In 78% of Market Indexes

CREA publishes 61 benchmark indexes—one national and 60 regional breakdowns. About three-quarters (78%) of regional measures show prices rising last month. That jumps to 90% if we exclude Nova Scotia and Ontario. If you heard prices were falling across Canada, would you imagine 9 out of 10 markets outside of two provinces showed price growth? Probably not, but that’s exactly what happened.

Canadian Real Estate Price Decline Due To Massive Drops In ON & NS

Ontario real estate prices slipped last month, with the breakdown revealing a bloodbath. The benchmark fell 0.2% (-$2,200) to $890,600 in May, but 3 in 4 of Ontario’s markets saw prices rise. A massive drop in the remaining quarter was enough to sink the whole index, and provide most of the Canada-wide downward pressure. 

Leading Ontario lower were the 5-digit monthly price drops in Oakville-Milton (-2.6%; -$34,800), Bancroft (-2.6%;-$13,500), and Brantford (-2.5%;-$17,400). It’s worth emphasizing those declines are at least 25x the national move. 

Greater Toronto provided the lion’s share of downward pressure though. Its benchmark home fell 0.5% (-$5,900) in May, 5x the rate of the nationally reported move. The sprawling real estate board historically covers 1 in 7 existing home sales across Canada, so it makes sense why it holds so much weight. However, when it diverges from the rest of the country, it skews the national picture. 

Nova Scotia real estate has become fairly active in recent years, but remains a small market. Only two benchmark indexes are published—Halifax-Dartmouth (-2.0%;-$11,000), and Nova Scotia (-1.7%; -$7,200). It would barely deserve a mention if it weren’t for how big those drops were. Last month they represented the 4th and 5th largest index declines, with the 3 indexes above all subindexes of Greater Toronto. That means the province’s drop was competitive with declines in one of the world’s most notorious real estate bubbles. Neat, eh? 

Canadian Real Estate Prices Climbed Outside of Ontario & Nova Scotia

Canadian real estate prices outside of those two provinces are heading in the opposite direction. Most indexes climbed in BC (75% of indexes), and Quebec (83%). Other provinces are much smaller markets, but all of their indexes show price growth. That includes Alberta (3 out of 3 indexes), the Prairies (4 out of 4), New Brunswick (4 out of 4), PEI (1 out 1), and Newfoundland (2 out of 2). Understandably, most of Canada is very confused by media reporting falling prices.  

Does that mean all clear outside of Ontario and Nova Scotia? That’s about as clear as mud. 

The real estate industry often says, “Real estate is local.” This might be an example since price declines in Ontario and Nova Scotia aren’t price drops across Canada. It’s just two provinces and just the Southern part of the former.   

That doesn’t necessarily mean the market is hot in those regions though. Typically when assets are traded in low volumes, the value is considered a stronger indicator of narrative than the market. Canada has unusually slow existing home sales in virtually every market and rising inventories. 

Anecdotal evidence from Realtors suggests that many buyers are looking to “get ahead” of rate cuts. They believe the cuts will boost prices. Rising inventory also typically drives prices lower, but they’re going the other way. Despite more competition, sellers clearly believe a rate cut will stimulate a buying frenzy. Neither of those points are local real estate factors but exuberance-driven ones. 

On that note, I’m reminded of one of the most notorious clips from the 2006 housing bubble. In it, one of the top industry execs at the time dismisses the national data flashing warning signs. Instead, he argues that three-quarters of housing markets are still rising, and “real estate is local.” History, amirite? 



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  • Reply
    Kyle 6 days ago

    The reason the two are now tied together is all of the idiots from Ontario moving here and bidding up 3-season cottages.

    • Reply
      Mortgage Guy 6 days ago

      That’s too funny. We were saying that in Ontario when people from Toronto were moving to cottage country, unaware that some of these places can’t even qualify for traditional financing because they aren’t real houses.

  • Reply
    Mortgage Guy 6 days ago

    Drive until you can afford, investor edition.

    It’s shocking how many buyers are looking for financing for investment properties in Alberta. The Bank of Canada correcting the mortgage credit chart to show higher-than-reported growth was not a good sign.

  • Reply
    Omar 6 days ago

    LOL. I thought it would have been an affordability issue then I realized Vancouver prices are still climbing.

    • Reply
      Jeff 6 days ago

      Combination of broad upzoning turning all homes into development lots and the Finance Dept flooding the markets with cheap loans for “mom & pop” developers.

      Seniors also get to defer their property taxes with a provincial subsidy, so they essentially pay nothing while crowding gov bond markets so taxpayers effectively subsidize the reduction of their debt.

      Nice rigged system if you can get in on it.

      • Reply
        Bryan 5 days ago

        That’s not how it works.

        From the gov of ON website:

        “Low-income seniors and low-income persons with disabilities can get a partial deferral of provincial land tax and education tax. The tax deferral applies to the tax increase in the current year and not to outstanding taxes.

        If you sell the property or if you no longer qualify for the tax deferral, a lien will be registered on the property and you will need to pay all deferred taxes.”

  • Reply
    Mark Bayly 6 days ago

    People are wasting their lives working to death to pay for housing.

  • Reply
    CB 5 days ago

    So is this a melt up outside of ON and NS that’s already tipped downward in those two provinces?

  • Reply
    Canada is dying. 4 hours ago

    GDP is dropping due to wage growth. Unemployment will rise especially in the face of outsourcing and A.I., and Canada is left with high home prices and an ever growing homeless and crime populations. You are just seeing the start of it.

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