This “softening” of the market represents a shift to more accurate home valuation, said Moshe Lander, an economics professor at Concordia University in Montreal. This landscape of lower home prices is likely to continue into Canada’s housing market in 2023, he said.
“Housing prices have been disconnected from reality for some time now,” Lander told CTVNews.ca in a telephone interview. “The rapid increase in interest rates is probably going to generate a rather quick fall in housing prices [and] a sudden correction.”
The Bank of Canada has implemented seven interest rate hikes in 2022 alone, taking its key interest rate from 0.25 per cent in February to 4.25 per cent in December. By increasing interest rates, the Bank of Canada’s goal is to reduce inflation, Lander said. While Canada’s annual inflation rate dropped slightly to 6.8 per cent in November, the central bank’s goal is to bring that number down to its target of about two per cent.
Higher interest rates aim to reduce demand, discouraging Canadians from opting for larger loans such as mortgages, Lander said. This is already being reflected in some of the latest data from the Canadian Real Estate Association (CREA), said Doug Porter, chief economist at the Bank of Montreal (BMO) and could pass through in Canada’s housing market in 2023.
According to the CREA, actual monthly sales activity in November 2022 was nearly 39 per cent below that of November 2021. There were 49,357 residential sales reported over the MLS systems of major Canadian cities in November 2021. Exactly one year later, there were 30,135 sales. Both figures are not seasonally adjusted.
“There was no significant change in the overall trend [since October],” Porter told CTVNews.ca in a telephone interview. “Sales are clearly below the 10-year average.”
A continuation of this slowdown in sales activity is something Porter said he expects to see in 2023. Elevated interest rates will also continue to put downward pressure on prices next year, he said.
Average home prices for residential properties in Canada have already fallen 12 per cent from November 2021 to November 2022, according to non-seasonally-adjusted data from the CREA. Based on BMO’s forecast, average home prices are expected to drop another 10 per cent within the next six to 12 months, Porter said.
“That would really just compensate for the backup in interest rates,” he said. “The market just got overcooked late last year into early this year, and it was due for at least a minor correction.”
As interest rates rise, economists from the Royal Bank of Canada (RBC) are predicting the country will enter a recession in the first quarter of 2023. This slowdown in economic activity will likely also put downward pressure on Canada’s housing market in 2023, said Porter.
Despite a projected drop in costs, this may not necessarily translate into greater housing affordability, Porter said, as homeowners will likely continue spending money, just on higher interest rates instead of home prices.
According to Bank of Canada deputy governor Sharon Kozicki, the central bank’s decision on whether to continue raising its key interest rate will rest on the latest economic data.
“We are moving from how much to raise interest rates to whether to raise interest rates,” Kozicki said during a speech in Montreal on Dec. 8.
However, the bank also remains ready to “act forcefully” with rates if necessary, she said.
BMO is forecasting an increase of 25 basis points in January before the central bank holds its rate steady until 2024.
It’s unlikely the Bank of Canada will reduce its key interest rate any time soon, Porter said. As a result, Canadians can probably say goodbye to the low interest rate environment witnessed throughout 2021.
“It’s highly unlikely we’re going back to that,” he said. “Those days are probably behind us. The kind of interest rates that we have now are closer to what we’re probably going to deal with in the years ahead.”
BUYERS AND SELLERS TO TAKE A ‘WAIT AND SEE’ APPROACH: EXPERTS
While average home prices may have dropped across Canada since February, not all cities have been impacted by rising interest rates in the same way, Porter said.
Sales in the Greater Toronto Area have slowed down significantly in recent months, said Nero Naveendran, a real estate agent based in Toronto. Residential sales activity over MLS systems dropped 49.6 per cent between November 2021 and November 2022 in Greater Toronto, according to data from the CREA that is not seasonally adjusted.
The reason behind this drop likely stems from a sense of uncertainty residents are feeling about future interest rate hikes, including whether they will take place and if so, by how much, Naveendran said.
“Nobody wants to get into a market where they expect [prices] to continue to go down,” he told CTVNews.ca in a telephone interview. “They are waiting on the sidelines until they know for sure that interest rates won’t go up anymore.
“If we know that the interest rates are going to stay the same, then I think sales will pick up.”
Sheila O’Brien, a real estate agent based in the Greater Vancouver Area, said she is also seeing clients take a “wait and see” approach as well, particularly those looking to sell their homes, as they assess the ongoing impact of rising interest rates on prices.
The city of Montreal has also seen fewer sales within its residential market since July, said real estate agent Jaclyn Rabin. Rising interest rates are having a significant impact on reducing buyer demand, she said, with those looking to purchase a home now being more cautious with their spending.
“We’re seeing a much less competitive market compared to where we were in 2020 and 2021, when inventory and interest rates were at an all-time low,” she told CTVNews.ca in a telephone interview. “Brace yourself for a more stabilized market.”
During the first couple of years of the COVID-19 pandemic, Montreal and several other real estate markets were characterized by overbidding and home offers with few terms and conditions, which may have led buyers to assume more risk, Rabin said. With interest rates driving down demand, there has been less competition, she said. If interest rates remain elevated, this trend is likely to continue throughout 2023, said Rabin.
“There’s less bidding wars and people are able to go through all their conditions … I think that’s a good thing,” she said. “It’s a rebalancing of the market.”
WILL MAJOR CITIES LIKE TORONTO AND VANCOUVER SEE PRICES DROP?
If the amount of inventory in Montreal increases, particularly among single-family homes, this may place additional downward pressure on home prices in 2023, said Rabin.
“Are we going to see a five to 10 per cent decrease?” she said, referring to single-family homes. “We could … It’s entirely possible.”
So far, sellers appear to be standing firm on their prices, Rabin said. Without an urgency to move, many may be unlikely to bend on asking prices. As a result, some properties may take longer to sell, she said.
Sellers are also being stubborn with their prices in Toronto, Naveendran said. Additionally, homes that are nicely staged and well-marketed not only continue to sell, but are also receiving multiple offers. These are trends Naveendran expects to continue in 2023, he said.
“The homes that are not presented [or] cleaned well are sitting on the market for months, it’s not like last year where everything was selling,” he said. “Now, people are looking for a home to live in, not an investment.”
Although the average price of a home sold in Toronto has dropped between February and July of 2022, prices have remained fairly steady throughout the rest of 2022, Naveendran said. If interest rates continue to rise, it’s likely home prices will continue to plateau or drop slightly in 2023, he said.
Elevated interest rates have also resulted in relatively stable home prices in the city of Vancouver throughout the fall, said O’Brien. The average sale price of a residential property in Greater Vancouver went from $1,232,213 in September 2022 to $1,201,186 in November 2022, according to the CREA. Both numbers are not seasonally adjusted.
Home prices in Vancouver will likely continue to soften throughout the spring and stabilize by the middle of 2023, she said.
“It’s a return to somewhat of a normal market,” O’Brien said. “People will have an opportunity to make logical decisions with timelines that allow for due diligence and probably a bit of negotiation.”
According to a new report from Re/Max Canada, 60 per cent of the country’s housing markets will be considered balanced in 2023.
PRAIRIES TO REMAIN RESILIENT AS ATLANTIC AFFORDABILITY ATTRACTS DEMAND
While larger real estate markets are expected to see prices continue to drop in 2023, the more significant corrections in average home prices will be among properties in smaller markets, said Robert Hogue, assistant chief economist for RBC.
This is particularly the case for markets located just outside of major urban centres, such as London and Kitchener in Ontario, or Fraser Valley in British Columbia. These regions saw some of the largest price increases in Canada during the pandemic, thanks to an influx of new residents moving from nearby hubs, Hogue said.
But with more Canadians physically returning to work, this trend has largely tapered off. As a result, these same markets are likely to see prices decline the most throughout the current correction period, Hogue said.
“Now that the frenzy is over, valuations are coming down to reflect the local realities,” Hogue told CTVNews.ca in a telephone interview.
According to Re/Max, average home prices in Kelowna, B.C., and Nanaimo, B.C., are likely to fall 10 per cent next year. Additionally, average prices in Barrie, Ont., are forecasted to drop 15 per cent.
Meanwhile, markets across the Prairie provinces have largely been resilient throughout the housing market correction so far, Hogue said. Although the region has seen some decline in average home prices and residential sales activity over the last year, these drops have been modest compared to other parts of Canada. This will likely continue to be the case in 2023, Hogue said.
Cities such as Calgary are even reporting an increase in average prices year-over-year. According to the CREA, the average sale price of a residential property in November 2022 was $504,518, not seasonally adjusted. This represents a 1.3 per cent increase compared to one year before.
Additionally, sales activity remains above pre-pandemic levels in Alberta and Saskatchewan, based on data from RBC, reflecting the region’s strong economy.
Housing markets in Atlantic Canada are not immune to the impact of rising interest rates either. However, they continue to be more affordable than those in larger urban areas, Hogue said. Because of this, demand will likely remain strong in the region thanks to interprovincial migration.
“If the correction [in Atlantic Canada] continues in Canada’s housing market in 2023, it will be more limited and end a little bit before other markets in Canada,” he said. “Those types of [migration] flows should provide some support for prices.”
Halifax in particular is beginning to stand out as a city where affordability is stretched, Hogue said. The market has seen tremendous demand throughout the pandemic, which has driven prices up significantly, he said.
According to Re/Max, Halifax will likely see average home prices increase by eight per cent in Canada’s housing market in 2023.
With files from CTV National News’ Jordan Gowling and The Canadian Press
CONCORD, N.H. (AP) — Two lawsuits about transgender girl athletes — one challenging a state ban at schools and the other on the right to protest transgender athletes’ participation on girls teams — were the subject of hearings in federal court in New Hampshire on Thursday.
The first case is about two transgender teen girls, one who played soccer on the girls team this fall and another who plans to participate on the track team this winter.
A federal judge ruled earlier this year that the teens can try out for and play on girls school sports teams. The order only applies to those two individuals for now as they seek to overturn the Fairness in Women’s Sports Act on behalf of all transgender girl students in New Hampshire.
Lawyers for the teens said in court Thursday they hoped the matter could go to trial and be resolved before the start of the next school year in September. They said the teens’ school districts and others in the state have asked for guidance regarding the law. Lawyers for the state said they needed more time to prepare.
Judge Talesha Saint-Marc suggested the timing of the trial was ambitious and asked that both sides talk further about scheduling.
The law, signed by Gov. Chris Sununu in July, bans transgender athletes in grades 5 to 12 from teams that align with their gender identity. It requires schools to designate all teams as either girls, boys or coed, with eligibility determined based on students’ birth certificates “or other evidence.”
Sununu had said it “ensures fairness and safety in women’s sports by maintaining integrity and competitive balance in athletic competitions.” About half of states have adopted similar measures.
In the second case Thursday, a judge was expected to hear from school district officials in Bow defending their decision to bar parents from wearing pink wristbands with “XX” — representing the female chromosomes — at a girls high school soccer game in September. The parents sued the district.
Parker Tirrell, one of the transgender girls challenging the state ban on participation, was playing on the opposing team that day.
The district issued no-trespass orders banning two parents from school grounds because they wore the wristbands. Those orders have since expired.
The judge also was expected to hear from the parents, who say their First Amendment rights were violated. They have requested a court order against the school district.
“Although the fall soccer season has ended, plaintiffs intend to continue wearing their wristbands at other school extracurricular events — such as swim meets and cross country meets — during this school year and in future school years,” the parents said in a court document.
School district officials said they acted appropriately.
The district “properly exercised its duty to protect Parker Tirrell from intimidation and harassment during the game,” it said in a court document.
It also said it issued reasonable sanctions against the two parents “for conduct they knew violated the school’s policies governing athletic events.”
Canadian under-20 coach Cindy Tye will serve as interim coach for Canada’s upcoming women’s friendlies against Iceland and South Korea.
Canada Soccer has said head coach Bev Priestman will not be returning in the wake of the recent independent report into the Olympic drone-spying scandal. Priestman, assistant coach Jasmine Mander and analyst Joey Lombardi are currently serving one-year suspensions from FIFA, with Lombardi having already resigned his Canada Soccer position.
Tye a former Canadian international who doubles as associate athletic director and women’s head coach at Dalhousie University, will be joined by returning assistant coach Neil Wood. The rest of the staff consists of Katie Collar (interim assistant coach), Jen Herst (incumbent goalkeeper and set play coach) and Maryse Bard-Martel (interim performance analyst).
Canada Soccer said assistant coach Andy Spence, who ran the team during the Olympics and last month’s 1-1 draw with third-ranked Spain, is “unavailable for this camp and is scheduled to return for the next FIFA window.”
Spence has not talked to the media since the Olympics.
Former Canadian international Diana Matheson, now chief growth officer of the new Northern Super League, and Collar, head coach of Vancouver Whitecaps FC Girls Elite, were added to the staff for the game against Spain and served as the team’s spokeswomen with the media.
The sixth-ranked Canadian women will face No. 13 Iceland on Nov. 29 and No. 19 South Korea on Dec. 3, with both games at the Pinatar Arena in Murcia, Spain.
The 23-player squad features some of Tye’s under-20 charges, including North Carolina State University defender Janet Okeke and SMU forward Nyah Rose who receive their first senior call-ups
Okeke, an 18-year-old from Laval, Que., and Rose, a 19-year-old from Markham, Ont., both represented Canada at the FIFA U-20 Women’s World Cup in September in Colombia. Jade Rose, Nyah’s older sister, has already won 26 senior caps but the 21-year-old Harvard University defender misses the Spain trip through injury.
There are also second call-ups for 18-year-old midfielder Jeneva Hernandez Gray from the Vancouver Whitecaps FC Girls elite team and 28-year-old defender Megan Reid from the NWSL’s Angel City.
The FIFA window, which runs Nov. 25 to Dec. 3, marks Canada’s final camp of the year, with North American-based players entering their off-season and European-based players returning to club competition.
Canada has played Iceland twice before, both at the Algarve Cup, with the teams playing to a scoreless draw in February 2019 and Canada winning 1-0 in March 2016.
The Canadian women are 7-1-1 all-time against South Korea and are unbeaten in their last five meetings. The teams drew 0-0 last time they met, in June 2022 in Toronto.
The roster announced Thursday has an average age of 23.
Kadeisha Buchanan, Sydney Collins, Cloé Lacasse and Quinn are also unavailable due to injury with Chelsea’s Buchanan the latest to go down, injuring her anterior cruciate ligament with England’s Chelsea. Canada Soccer said Seattle Reign forward Jordyn Huitema was unavailable due to personal reasons.
Earlier this month Nyah Rose was named to the Atlantic Coast Conference’s third-all-star team, the first Mustang in program history to earn All-ACC honours.
Rose led the American Athletic Conference with 11 goals as a freshman before SMU moved to the ACC.
She scored five goals in 11 games last season, missing five matches early due to international duty with the Canadian U-20 team. Rose scored Canada’s first tournament goal against France in a 3-3 draw and had seven shots on goal in the 9-0 rout of Fiji.
Earlier this year, Rose was one of only three sophomores named to the 44-player 2024 Hermann Trophy Watch List. The MAC Hermann Trophy honours the top NCAA soccer player.
There is another Rose on the team — Leicester City forward Deanne Rose, no relation.
Okeke played in 11 games for North Carolina State this season.
Hernandez Gray was also part of the Canadian team at the U-20 World Cup in Colombia and led the Whitecaps Girls Elite side at the inaugural CONCACAF W Champions Cup.
Reid, a California native whose mother was born in Canada, gave up soccer after playing at the University of Virginia to pursue a career as a paramedic. She then returned to the sport, joining the NWSL’s Angel City for the 2022 pre-season as a non-roster invitee.
She was rewarded in January with a new contract that runs through 2025. Reid’s play also earned her an invitation in February to Canada’s camp in San Antonio ahead of the CONCACAF W Gold Cup.
Canada Roster
Goalkeepers: Sabrina D’Angelo, Aston Villa (England); Lysianne Proulx, Juventus (Italy); Kailen Sheridan, San Diego Wave (NWLS).
Defenders: Gabrielle Carle, Washington Spirit (NWSL); Vanessa Gilles, Olympique Lyonnais (France); Ashley Lawrence, Chelsea (England); Janet Okeke, North Carolina State (NCAA); Megan Reid, Angel City (NWSL); Jayde Riviere, Manchester United (England); Shelina Zadorsky, West Ham (England).
Midfielders: Marie-Yasmine Alidou, Benfica (Portugal); Simi Awujo, Manchester United (England); Jessie Fleming, Portland Thorns (NWSL); Julia Grosso, Chicago Red Stars (NWSL); Jeneva Hernandez Gray, Vancouver Whitecaps; Emma Regan, HB Køge (Denmark).
Forwards: Janine Beckie, Racing Louisville (NWSL); Adriana Leon, Aston Villa (England); Nichelle Prince, Kansas City Current (NWSL); Deanne Rose, Leicester City (NWSL); Nyah Rose, Southern Methodist University (NCAA); Olivia Smith, Liverpool (England); Evelyne Viens, AS Roma (Italy).
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This report by The Canadian Press was first published Nov. 21, 2024.
