Most Canadian Real Estate Markets Fell From Peak, Down As Much As $355,000

Canada’s exuberant real estate buyers are suddenly not-so-exuberant after interest rate hikes. Canadian Real Estate Association (CREA) data shows the composite benchmark price made a sharp drop in July. Prices fell by tens of thousands of dollars at the national level, with 9 in 10 markets seeing a drop. Markets have seen a typical home’s value drop up to $355,000 from peak valuations. Not even a full year of gains has been rolled back in any real estate market — that’s how out-of-control things were. 

Canadian Real Estate Prices Fell $27,000 Last Month

Canadian real estate prices are down from peak, with the typical home across the country making a sharp drop. The benchmark price fell to $782,300 in July, down 3.4% (-$27,400) from the month before. Compared to the peak reached in March 2022, prices are now down a whopping 9.9% (-$86,000). It’s only a hair shy of being a technical correction, with 9 in 10 (89%) of CREA’s composite price indexes down from peak. 

Canadian Real Estate Prices Are Down In Most Markets

The price of a typical home (composite-benchmark) for Canadian real estate markets in July 2022 vs peak valuation.

Source: CREA; Better Dwelling.

Canadian Real Estate Markets Fell As Much As $87k In July

Southern Ontario led Canada’s real estate boom over the past couple years and is leading its bust. The biggest monthly price drops across the country were  all located in the region. The 3 largest dollar declines were Oakville (-$86,800), Mississauga (-$55,100), and Hamilton–Burlington (-$51,400). Absolutely monster moves lower, and deserves emphasizing this was just one month. Price swings in either direction of this size are extreme volatility. 

Southern Ontario Real Estate Led July’s Price Drop

Southern Ontario real estate also leads in the biggest dollar drop from peak. The top three declines were in Oakville (-$355,000), Mississauga (-$224,100), and Cambridge (-$217,000). The region led on the way up and is leading on the way down, as price discovery sets in. That said, prices increased so much over the past few years this barely puts a dent in the gains made thus far.  

Canadian Real Estate Monthly Price Change

The change in price for a typical home across Canada in the month of July 2022. 

Source: CREA; Better Dwelling.

Toronto and Vancouver real estate avoided the extremes of change — the latter more than the former. Greater Toronto’s composite price fell 3.9% (-$47,400) in July, and is now down 13.3% (-$177,500) from its peak. It narrowly escaped the lists above, with the fourth biggest monthly price decline. 

Greater Vancouver real estate has only begun to contract, though it was a fairly sharp one for the month. A composite home in the region fell 2.3% (-$28,600) in July, and is down 4.5% (-$57,400) from the peak. Vancouver had a later peak compared to the typical peak across Canada, but it’s making up for the lag quickly. 

Southern Ontario Real Estate Is The Fastest Falling

Once again, Southern Ontario dominated when it came to prices falling at the fastest rate last month. The fastest falling markets in the month were Huron—Perth  (-6.6%), North Bay (-6.5%), and Oakville—Milton (-6.3%). Oakville’s having a really rough time, isn’t it? 

Canadian Real Estate Markets Have Lost As Much As 22% From Peak

Southern Ontario also led for the biggest drops from peak as a rate, with the worst markets losing more than a fifth of value already. The bottom three performers as a rate were Cambridge (-21.8%), Kitchener—Waterloo (-21.8%), and Oakville—Milton (-21.6%). As big as these price declines are, not one of these markets has shown negative annual growth — that’s how out of control home price growth has become.

A Handful of Canada’s Markets Have Hit New Record Highs

A handful of markets were able to buck the trend and reach a new all-time high, despite tighter financing. At the all-time high, the fastest growing markets were PEI (+1.9%), St John’s (+1.3%), and Sault Ste Marie (+0.9%). Only six relatively small and low volume markets printed a new all-time high though.  

Canadian real estate prices are generally falling and very fast. Regions like Southern Ontario saw the biggest booms and are now falling at a breakneck speed. Even with these substantial declines, prices still haven’t returned to last year’s level. This highlights the unprecedented monetary policy mistakes organizations like the BIS attribute recent price growth to

15 Comments

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  • Reply
    Trader Jim 7 days ago

    Why are policymakers complaining that prices are falling at this pace when they didn’t complain they were rising even faster?

    This is why we need growth, but not out of control growth. 30% over 4 years is much better than 60% over two years, and 30% down in one year. It’s like we elect people to put us in as much pain as possible to get to the same place we’d get with normal planning and fewer societal failures.

    • Reply
      Kate 7 days ago

      Because they trade on their insider knowledge. How many sold their investment properties before the Bank of Canada began hiking?

      • Reply
        Erik M 6 days ago

        The BOC warned of rising rates and telegraphed their hand well in advance, same with the FED in the states. The stock market was listening, it started pricing it in well in advance.

        Most people don’t pay attention until it actually becomes reality. To say they were insiders seems a stretch, we all had the same information for months if not longer.

    • Reply
      Zaheer Jilani 7 days ago

      A very logical argument.

  • Reply
    David Tran 7 days ago

    Home prices are falling as much as a whole house in some parts of the US, and the healthcare access is probably the same at this point. In Toronto there’s ads for US doctors advertising they can skip the wait times and pay — that’s how brutal things are now.

  • Reply
    Frank Daugherty 7 days ago

    Toronto’s one-month price drop is about the net median household income. That’s bananas.

  • Reply
    bluetheimpala 7 days ago

    I don’t know but I assume you do Kate or you wouldn’t just dangle it. That would make you look like you’re part of the tinfoil hat army. Please enlighten us!

    • Reply
      expat 6 days ago

      Yeah, there’s absolutely no examples for this in the real estate market around us. Just tinfoil hats!

  • Reply
    aliveandthrivingrebel 7 days ago

    Perhaps people don’t want to live in the two provinces that are still pushing the mandate agenda? Also look like people are trying to get out of the cities.

    • Reply
      Adam 6 days ago

      But prices are ridiculous in every province, in every part — even outside of the cities.

      I will say that one of the big reasons people moved from the city over the past two years was more relaxed mandates. Break the cycle of why people need to do something (like be in the city) and it breaks the poor decision making process.

  • Reply
    Ron Bruce 7 days ago

    Warehousing people is based on speculation regardless of the year. The investment spent on innovation, disruptive technologies or intellectual property to assist Canadians compete on the global stage is extremely limited. Where will the income come from to help purchase space in the over-taxed energy-inefficient family warehouse?

  • Reply
    Edward 7 days ago

    I remember not too long nearly everyone was claiming this was a long-term systemic supply issue and that housing prices were skyrocketing because of supply.

    Let me get this straight…

    1) The government/BofC intervenes in the market and suppresses interest rates and house prices appreciate at their fastest level in recorded history (Jul 2020 – Mar 2022)

    2) The government/BofC reverses course on their intervention and reduces their suppression of interest rates and house prices begin falling, and falling FAST (Mar 2022 – Aug 2022)

    And people say its a “supply issue”

    Ermmm…. what is the common denominator here?

    • Reply
      J 6 days ago

      Sucker punch to the FOMO and poor renters. Investors have ways to keep funding coming legit or other wise. The honest schmos are the losers in ever cycle.

  • Reply
    Desai 5 days ago

    The peak and bottom are just arbitrary terms for laymen who manage to raise their families in the county called GTA & Vancouver. However, the policymakers can do something if the boat is sinking or sailing too fast. Sadly, our politicians are busy imposing a carbon tax, inaugurating rainbow flags, and munching at multicultural events. Or they are not literate to understand this monster issue. It is difficult for people to buy, but renting is equally become outrageously expensive. Look at our commercial rent. Who will come to this cold and expensive place to start a business? Anyway, Canadian and Investor found a business called Renting, Flipping, and Investing, which is way easier than production, startups, and innovation. We should stop telling our next generation to study hard because anyway, most of them will never be able to afford a home or better life. Instead, teach them how to manipulate the system to make easy money. Why aren’t they increasing rental income tax to 45%? Multiple properties at 45%, foreign investors to 200%, no way because of the kickbacks from all these profit-making agencies. We have enough homes in this county but that is out shadowed by greed.

  • Reply
    John Grant 4 days ago

    Why do people buy hot stocks at absurd record highs…because they think its going higher, not because its worth it. Even a 50% drop would/will leave many homes overvalued.

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