It’s official, Canada’s housing prices are cooling down. On May 16, 2022, The Canadian Real Estate Association stated:
National home sales dropped by 12.6% on a month-over-month basis in April.
Actual (not seasonally adjusted) monthly activity came in 25.7% below the monthly record set in 2021.
The number of newly listed properties was down 2.2% month-over-month.
While the numbers are indicating a drop in the resale value of housing prices, this trend was foreseen but rest assured, the sky is not falling. Some analysts are predicting a rough road ahead while other industry experts are more balanced in their perspective. Robert Hogue, a senior economist at Royal Bank of Canada stated:
“Demand-supply conditions remain tight overall but the trend is improving. In some markets (including Toronto, Hamilton, Niagara region, Kitchener-Waterloo and Windsor), the sales-to-new listings ratio even reached balanced-market territory in April."
According to Justin Havre & Associates of RE/MAX:
“It’s fair to say that the Canadian housing market has been like a boiling pot of water on a stove for the last two years. It’s way too hot and… needed to put a little bit of calmness in it,” he said."
He further goes on to suggest that:
“I do foresee that the real estate market will stabilize more with activity [and] prices may fluctuate a little bit monthly, but year over year I think we’ll continue to see price gains,” he said. “Maybe not to the tune of 40% plus, but I do think there will be moderate price gains.”
While the short-term outlook is a slowing down in the home buying market it does not mean sellers should panic. What it does indicate is that the steep rise in the price of a home is gone, at least for now. You need to be balanced in your expectations and continue to pay attention to the trends in the real estate industry.