Average sale price of Canadian home declines compared to previous year for 1st time since 2013
The average sale price of a Canadian home has fallen by 0.3 per cent in the past year, the first yearly decline since 2013.
The average price of a Canadian home sold on the multiple listing service (MLS) in July was $478,696, the Canadian Real Estate Association said Tuesday.
Stripping out Toronto and Vancouver, the average price nationally would drop by more than $100,000, to $381,297.
The association says there also were 12 per cent fewer sales in July compared to a year ago.
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“July’s interest rate hike may have motivated some homebuyers with pre-approved mortgages to make an offer,” CREA president Andrew Peck said.
Ontario makes up a large percentage of Canada’s overall housing market, and rule changes implemented by the provincial government in April aimed at cooling the market appear to have hit the Toronto area hard, with prices and sales figures well below the peak reached that month.
But CREA says there are signs that the impact of those changes are starting to wane.
“July marked the smallest monthly decline in Greater Golden Horseshoe home sales since Ontario’s Fair Housing Plan was announced in April,” said the realtor group’s chief economist, Gregory Klump. “This suggests sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether that’s indeed the case.”
It it happens, it means the unwinding in Toronto’s housing market will follow a remarkably similar path the one that Vancouver took a year ago, when B.C. implemented a 15 per cent foreign buyer’s tax that hit the market just as hard, before recovering.
After having dipped in the second half of last year, benchmark home prices in the Lower Mainland of British Columbia have recovered and are now at new highs — up nine per cent in Vancouver and 15 per cent in the Fraser Valley.
But outside of those two cities, there’s little in CREA’s report to cause much alarm.
“The story really depends on where you are in Canada,” BMO economist Robert Kavcic said. “Right now, much of the attention remains squarely on Toronto where the price correction continued in July. Vancouver’s market continues to recover from last year’s policy-induced mini-correction, while markets like Ottawa and Montreal and gathering momentum.”
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