After fuelling Canada’s economy through the COVID-19 pandemic, the real estate market is showing signs of weakness as home prices fall and bidding wars dissipate.
It’s welcome news for prospective buyers hoping for a better price. But as the busy fall season nears, realtors and economists are at odds over how long the pricing slide will last and how low it will go.
“The fall is going to be interesting because we’re going to see probably more buyers jumping into the market and you don’t need a ton more buyers to provide a little bit more stability to prices,” said John Pasalis, president of Realosophy Realty Inc. in Toronto.
“Just a little bit of a bump in demand could be the difference between homes selling in three, four weeks versus selling in two weeks or selling a lot faster.”
The average home price is still above pre-pandemic levels, but increasing mortgage rates and inflationary pressures are weighing on the market.
When pandemic lockdowns began in March 2020, the Toronto Regional Real Estate Board said the average home price in the area — one of Canada’s hottest — sat at $902,680. Last month, it was $1,074,754, a one per cent hike from July 2021, but a six per cent drop from June 2022.
4:24 Despite rising interest rates some home buyers are being lured back into the market by falling house prices
Despite rising interest rates some home buyers are being lured back into the market by falling house prices – Aug 19, 2022
The latest data from the Canadian Real Estate Association (CREA) showed prices hit $629,971 in July, down five per cent from $662,924 last July. On a seasonally adjusted basis, it amounted to $650,760, a three per cent drop from June. When pandemic lockdowns began in March 2020, the average national price was $543,920.
The association forecast the national average home price will rise by 10.8 per cent on an annual basis to $762,386 by the end of 2022 and hit $786,252 in 2023.
But some economists are anticipating an even greater price reduction.
In June, a trio of Desjardins economists said they expected the average national home price to fall by 15 per cent between its February high _ $817,253 _ and the end of 2023, but because “we’re almost there,” they adjusted their forecast in August to predict a drop between 20 and 25 per cent.
“Home prices continue to fall and have further to go before they find a bottom,” said Randall Bartlett, Helene Begin and Marc Desormeaux, in a report released July 11.
“That said, we still believe home prices will end 2023 above pre-pandemic levels nationally and in all 10 provinces.”
In anticipation of a drop in prices, agents have noticed prospective buyers sitting on the sidelines of the market in recent months, while sellers come to terms with the fact that their homes won’t fetch as much money as they would have at the start of the year.
Lori Fralic calls it a “stalemate.”
“We are seeing lowball offers,” said the Vancouver agent with Keller Williams Realty VanCentral.
“There’s lots of bargain hunters out there who are throwing out offers but if they don’t have to sell, a lot of sellers are saying, ‘no, sorry, not taking it.”
4:39 Your Money: Update on Canadian housing market
Your Money: Update on Canadian housing market – Aug 11, 2022
It’s a change from the torrid pace of sales and frenzied bidding wars seen earlier in the year and late last year.
Much of the shift is attributable to mortgage rates, which mirror fluctuations in interests rates and can eat into buying power.
The Bank of Canada increased its key interest rate by one percentage point to 2.5 per cent in July in the largest hike the country has seen in 24 years.
Economists foresee the increases continuing and Fralic said they’re already encouraging people who don’t need to buy immediately to hold off.
She’s seen a drop in prices in B.C., but said it’s not as much of a decrease as many expected.
“If people are thinking (prices) are going to plummet, I don’t think that’s accurate,” she said.
“If you look at the 10-year average of Metro Vancouver, housing prices are way up and if they do dip, they might dip slightly and come back up. There’s always been sort of a steady incline with dips along the way.”
1:53 New poll finds majority of Canadians are cutting back on spending
New poll finds majority of Canadians are cutting back on spending
The Real Estate Board of Greater Vancouver said the composite benchmark price for the region _ often Canada’s hottest _ sat at more than $1.2 million in July, a roughly 10 per cent increase from July 2021 and a two per cent drop from June 2022.
“It’s anyone’s guess how much prices will fall,” Sherry Cooper, chief economist at Dominion Lending Centres, said.
Markets, she said, tend to be very localized and the surges or drops some see may not be mimicked in others.
For example, she said Alberta has not seen the slowdown many other Canadian markets have because its energy sector is much stronger than it was in the past.
But Cooper noted home sales activity have declined very sharply in the Greater Toronto Area, the Greater Golden Horseshoe Area and in parts of British Columbia around Vancouver.
“It’s the markets that experienced the 50 per cent increase in home prices that have seen the biggest correction, and that’s what you’d expect because those are the most expensive homes in Canada with the largest outstanding mortgages.”
VANCOUVER – The Vancouver Canucks announced Tuesday that defenceman Alex Edler will sign a one-day contract in order to officially retire as a member of the NHL team.
The signing will be part of a celebration of Edler’s career held Oct. 11 when the Canucks host the Philadelphia Flyers.
The Canucks selected Edler, from Ostersund, Sweden, in the third round (91st overall) of the 2004 NHL draft.
He played in 925 career games for the Canucks between the 2006-07 and 2020-21 seasons, ranking fourth in franchise history and first among defencemen.
The 38-year-old leads all Vancouver defencemen with 99 goals, 310 assists and 177 power-play points with the team.
Edler also appeared in 82 career post-season contests with Vancouver and was an integral part of the Canucks’ run to the 2011 Stanley Cup final, putting up 11 points (2-9-11) across 25 games.
“I am humbled and honoured to officially end my career and retire as a member of the Vancouver Canucks,” Edler said in a release. “I consider myself lucky to have started my career with such an outstanding organization, in this amazing city, with the best fans in the NHL. Finishing my NHL career where it all began is something very special for myself and my family.”
Edler played two seasons for Los Angeles in 2021-22 and 2022-23. He did not play in the NHL last season.
This report by The Canadian Press was first published Sept. 17, 2024.
WASHINGTON (AP) — Billie Jean King will become the first individual female athlete to be awarded the Congressional Gold Medal.
Reps. Brian Fitzpatrick of Pennsylvania and Mikie Sherrill of New Jersey announced Tuesday that their bipartisan legislation had passed the House of Representatives and would be sent to President Joe Biden for his signature.
The bill to honor King, the tennis Hall of Famer and activist, had already passed unanimously in the Senate.
Sherrill, a Democrat, said in a statement that King’s “lifetime of advocacy and hard work changed the landscape for women and girls on the court, in the classroom, and the workplace.”
The bill was introduced last September on the 50th anniversary of King’s victory over Bobby Riggs in the “Battle of the Sexes,” still the most-watched tennis match of all-time. The medal, awarded by Congress for distinguished achievements and contributions to society, has previously been given to athletes including baseball players Jackie Robinson and Roberto Clemente, and golfers Jack Nicklaus, Byron Nelson and Arnold Palmer.
King had already been awarded the Presidential Medal of Freedom in 2009. Fitzpatrick, a Republican, says she has “broken barriers, led uncharted paths, and inspired countless people to stand proudly with courage and conviction in the fight for what is right.”
SURREY, B.C. – Premier David Eby says new account control measures for young Instagram users introduced Tuesday by social media giant Meta are the “minimum” expected of tech companies to keep kids safe online.
The parent company of Instagram says users in Canada and elsewhere under 18 will have their accounts set to private by default starting Tuesday, restricting who can send messages, among other parental controls and settings.
Speaking at an unrelated event Tuesday, Eby says the province began talks with social media companies after threatening legislation that would put big tech companies on the hook for “significant potential damages” if they were found negligent in failing to keep kids safe from online predators.
Eby says the case of Carson Cleland, a 12-year-old from Prince George, B.C., who took his own life last year after being targeted by a predator on Snapchat, was “horrific and totally preventable.”
He says social media apps are “nothing special,” and should be held to the same child safety standards as anyone who operates a place that invites young people, whether it’s an amusement park, a playground or an online platform.
In a progress report released Tuesday about the province’s engagement with big tech companies including Google, Meta, TikTok, Spapchat and X, formerly known as Twitter, the provincial government says the companies are implementing changes, including a “trusted flagger” option to quickly remove intimate images.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 17, 2024
