Home prices moved lower at the national level, but that reality isn’t aligned with buyers in most provinces. Canadian Real Estate Association (CREA) data shows the price of a typical home fell in January, but most provinces saw prices rise. The decline has been largely confined to BC and Ontario, where weak sales and robust inventory are dragging prices even lower.
Canadian Home Prices Have Corrected 21.8% Since Peak
Let’s start with the national numbers for a quick refresher. The price of a typical home fell 0.3% (-$2.0k) to $665,200 in January, down 4.9% (-$34.1k) from a year earlier. Since peaking in March 2022, prices have plunged 21.8% (-$183.6k), effectively erasing roughly four years of gains. It’s a sharp correction, but the vast majority of that downward pressure is concentrated in just a few provinces, at least for now.
Home Prices Climb In Most Canadian Provinces
Canadian home prices: 1-month change, by province.
Source: CREA; Better Dwelling.
Most provinces saw prices rise last month, with five of nine provincial HPI benchmarks moving higher. Only Newfoundland (NL) and Quebec (QC) reached new highs. NL home prices climbed 0.8% (+$2.8k) to $337,900 in January, while QC saw prices rise 1.0% (+$5.4k) to $535,000.
Nova Scotia was the only other province among the five to post a material gain, rising 1.1% (+$4.4k) to $417,700. The growth follows an unusually sharp drop in December, rolling back roughly a third of the drop. That feels more like a dead cat bounce than a reversal, but new stimulus policies can change a market fast.
Other Provinces Are Being Welcomed Back To Reality
The remaining markets saw prices fall, led by New Brunswick’s 1.4% (-$4.7k) drop to $329,400 in January. It’s a substantial move for just one month, representing over half of the 2.1% (-$6.9k) drop from its October peak. The market has been relatively resistant to correction, but it’s getting harder to push prices higher.
BC and Ontario followed, in that order. BC home prices fell 0.9% (-$7.8k) to $886,200 in January, while Ontario slipped 0.5% (-$3.4k) to $745,800. Both of these markets peaked back in 2022 and haven’t seen demand return, suggesting a second leg of the correction is forming.
Canadian Real Estate Correction Has Yet To Spread Outside of BC and Ontario
Canadian benchmark home price by province, change from peak.
Source: CREA; Better Dwelling.
Nowhere in Canada has seen prices correct quite like Ontario in recent months. Since peaking at the start of 2022, the province has seen home prices move 26.0% (-$262.7k) lower. BC follows with a 15.2% (-$159.1k) drop from peak, which seems modest only in contrast to Ontario’s drop. Alberta (-5.4%; -$28.3k) and Nova Scotia (-4.5%; -$19.8k) trail significantly, each seeing about a fifth of Ontario’s drop.
Home prices fell at the national level, but a breakdown shows this is very much a regional story. The industry hasn’t been shy when it comes to reminding people, but it’s worth noting that BC and Ontario historically lead the market. They led on the way up, and time will tell if they’re doing the same on the way lower.
Rapidly soaring prices were supported by a narrative of low rates and a population boom. Both of those factors have since disappeared, but only BC and Ontario home prices are adjusting to the new narrative. Asset prices can coast for as long as markets suspend reality, but the further the drift, the harsher the reality check.
Traded Toronto for Halifax in 2019, and thought I’d never look back. Not that real estate consumed the Nova Scotia economy, only a matter of time before its economy circles the drain too. Where the hell is real estate normal in Canada?
Ontario prices down 26% and still stupid high for a province with no young people, and a population that’s shrinking.
It’s gonna be bad for a looong time there.
How fake are these numbers ? You’ll have a very hard time convincing me that any data provided by the real estate lobby (which CREA is part of) is accurate. It’s like having Dracula in charge of security at the blood bank. Give us access to the real data and we’ll see a completely different picture.
Tthe problem is ontario was never that valuable. On has consistently had loweri ncome, higher unemoyment, than alberta.
The massive runup in prices in bc at least is relayed to a lack of land to develop and spectacular environment.
The gta has neither of those things. The obvious issue is compleye lack of risk mgmt by our banks and the feds. Currently we have the taxpayet sotting on hundreds of billuons of loan guarentees to banks, that we habe no way to pay back..
So while it might be ok if those wwho profitted from this would pay, but they wont, we will.