The slowdown underway in Canada’s housing market continued last month, new figures from the Canadian Real Estate Association showed Thursday, with the average selling price falling to just over $630,000, and the number of home sales off by almost 40 per cent.
The group, which represents more than 100,000 realtors across the country, said that the number of homes sold in November fell by 38.9 per cent from the same month a year ago. November isn’t typically a busy month for home sales, as cooler weather often pushes buyers to the sidelines this time of year.
But the housing market was even chillier than usual this November, with a little over 33,000 homes being sold during the month. That’s down about 10 per cent from the typical November sales pace, and down from almost 50,000 in the same month in 2021.
The average selling price of a home that went on CREA’s Multiple Listings Service was $632,802. That’s 12 per cent below what it was a year ago, and down from 22 per cent from the peak hit in February of this year.
That was before the Bank of Canada started its aggressive campaign of rate hikes, which has taken the wind out of the market’s sails by making it much more expensive to borrow money.
CREA says the average selling price can be a misleading picture of the market, since it is easily skewed by sales in big expensive cities like Toronto and Vancouver, so it trumpets another number, the House Price Index, as a better gauge of the market.
The HPI fell by 1.4 per cent during the month to $744,000, and is now down by more than 11 per cent from its February peak, after having fallen for nine months in a row.
“There were no big surprises in the November housing numbers, with the data showing the same trends of lower sales and moderating prices we’ve been seeing for a number of months now,” said CREA chair Jill Oudil.
That price moderation is welcome news for recent buyers like Yildiz Marcelin, who purchased a townhouse in Toronto.
She and her family have owned a condominium in the city since 2016, but with daughters growing up fast, they have been looking for more space for years.
They tried to buy a townhouse earlier in the pandemic, but came up short again and again. It was usually a stressful experience of having to decide whether or not to make an offer based on one rushed visit, and bid way over the asking price or be left disappointed, she told CBC News.
“The first time, in 2016, there was this really nice townhouse that we had seen in the Junction Triangle that we really wanted,” she said, but it went for $100,000 over asking — well out of their price range.
The recent pullback allowed them to get a comparable unit in the same area, “and we were able to purchase it under the asking price.”
New data from the Canadian Real Estate Association shows both home sales and average prices in Canada have fallen yet again, with the average cost of buying a home dropping to $632,000. It’s a trend that’s expected to continue well into 2023 as higher interest rates make mortgages more costly.
Economist Rishi Sondhi with TD Bank says the numbers released Thursday paint a clear picture of a market that is slowing down, and is likely to continue to do so.
“Demand continues to decline under the weight of rising interest rates,” he said, noting that the central bank has already raised its interest rate once since the time period covered in today’s data release. “We think they’ll move their rate slightly higher early next year, [but] all of this points to continued sales declines in the coming months.”