Pace of real estate slump quickens; sales and average prices down from last year

Roger Pettingell Sarasota Real Estate

Canada’s housing market continued its slowdown last month, with the average selling price of a home touching $665,850 — a decline of almost 20 per cent since February.

The Canadian Real Estate Association (CREA), which represents more than 100,000 brokers, agents and salespeople across the country, said Friday that the volume of home sales fell by 5.6 per cent during the month, and is down by almost one-quarter compared to last year.

“Activity continues to slow in the face of rising interest rates and uncertainty,” CREA chair Jill Oudil said in a statement.

After rising at a rapid pace for much of the pandemic, higher interest rates slammed the brakes on Canada’s housing market this spring.

Average selling prices have declined each month since February 2022, and are down by 1.8 per cent compared to what they were a year ago.

“What goes up must come down, and the Canadian housing market continued to cool in June under the weight of higher interest rates,” TD Bank economist Ksenia Bushmeneva said.

Ontario led the way down, as selling prices in the province’s suburban markets that rose the most during the pandemic are now coming back to earth.

“Sales and prices are down disproportionately more in Ontario and B.C., which suffered severe affordability deteriorations during the pandemic,” Bushmeneva said. “We expect that home prices and sales will move even lower amid further pressure from borrowing costs.”

Waleed Hamed has been waiting to buy a home for several years, and says he has been watching the current slowdown with great interest. (CBC)

She isn’t the only one thinking the market still has a way to go before bottoming. Waleed Hamed has been on the sidelines of Canada’s housing market for years, waiting for a chance to buy, but he said he could never justify making the leap.

The market in and around Courtice, Ont., where he’s living with his parents, has definitely turned in recent months, he said. Yet Hamed is still reluctant to buy, because he thinks further price declines are coming.

“I think we are going to see prices drop for a while,” he told CBC News in an interview this week. “I still feel like we are near the very top.”

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