The Canadian real estate market went from boom to bust in less than a year. Data from the Canadian Real Estate Association (CREA) show that all major composite indices are down from their November peaks. Much of Canada’s real estate market has even “crashed” due to a mix of reality and rising interest rates.
Canadian property prices have fallen $142,000 from their peak
Canadian property prices are below peak in all major markets across the country. At the national level, typical homes have fallen 16.4% (-$142,300) since his March 2022 peak. Some markets are down 20% or more from their peak, fitting the technical definition of a crash.
Canadian property prices fall across all markets
Composite benchmark prices for homes in the Canadian real estate market.
Source: CREA; Better Housing.
Canadian housing has plummeted in 18 markets so far
Markets experiencing the largest percentage point declines have lost a quarter of their value. The largest declines were observed in London – St. Thomas (-26.1%), Kitchener – Waterloo (-25.8%) and Cambridge (-25.1%). All three markets have officially crashed, with 18 major market indices marking crashes.
Canadian property prices since peak (%)
Percent change in price from peak to November for multiple home prices by market.
Source: CREA; Better Housing.
Those in the greater Toronto area may have noticed that the biggest drop is just a short drive away.In fact, nine of the top ten price declines occurred in the Greater Toronto area. Hamilton (-22.6%), a small commuter city about an hour from Toronto, caught the attention of the IMF for her fourth growth in 2019.
Canadian property market plunges from peak to $398,000
Astronomical growth in Canadian real estate means a very large depreciation of the dollar. The biggest drops from peak were Oakville-Milton (-$398,700), Mississauga (-$286,000) and Cambridge (-$249,600). Again, these markets are all within an hour of Toronto and are considered commuter suburbs. In general, the typical Ontario home (-$210,900) has seen a significant price drop since peaking in March 2022.
Canadian property prices since peak ($)
Change in dollar value of prices from peak to November for multi-family home prices by market.
Source: CREA; Better Housing.
Toronto and Vancouver real estate are fixing and almost crashing
Real estate in Toronto and Vancouver hasn’t gone to extremes, but it’s not immune to the correction. Typical homes in Toronto have fallen 18.4% (-$245,200) since peaking in March 2022. Vancouver is down 10.5% (-$133,100) from its April 2022 peak. Note that over the past two years, Vancouver’s prices have not experienced as big a boom as Toronto’s. However, these are still six-figure losses in less than a year.
The adjustment in Canadian property prices is widely blamed on interest rates. They play a big role when it comes to funding and investor profitability, helping to cool demand, although prices peaked in his March before interest rates had a big impact on purchasing power. is worth noting. Most buyers have prior buyer approval, which limits the impact of rate hikes on absorption rates.
Some banks argue that this reinforces the belief that sentiment drives growth. Sentiment-driven price gains tend to produce the biggest bubbles and the sharpest corrections. Because the only thing that needs to change is the belief that prices will always go up. It seems more people are starting to realize that prices don’t always go up.
