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What Canada’s housing market could look like in 2023



After a series of interest rate hikes throughout 2022, the average price of a home in Canada has dropped by more than $180,000 since hitting its peak in February.

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 2023, he said.

“Housing prices have been disconnected from reality for some time now,” Lander told 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).

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 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 housing prices, 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.


The Bank of Canada has another announcement scheduled for Jan. 25. While the central bank suggested it may be ready to press pause on interest rate hikes, further increases have not been ruled out entirely.

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.”


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 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 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.”


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.


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 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 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 2023.

With files from CTV National News’ Jordan Gowling and The Canadian Press

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Irish Real Estate Returns Drop Amid Higher Interest Rates – Bloomberg



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Irish Real Estate Returns Drop Amid Higher Interest Rates  Bloomberg


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Bank of Canada comments offer light at the end of the tunnel for real estate, mortgage markets, experts say



Canada’s struggling real estate sector is breathing a sigh of relief, but it wasn’t so much the size of the Bank of Canada’s Jan. 25 rate hike as the language that came with it that was cause for optimism.  

That’s because while the central bank boosted its benchmark overnight interest rate by 0.25 basis points to 4.5 per cent, its eighth consecutive increase, it also signalled it would put the hiking cycle on pause — at least for now.  

“A 25-basis-point increase or no increase was what we needed, along with the kind of language … that indicated we were essentially where we needed to be” Royal LePage CEO Phil Soper said in an interview. “What’s important at this stage is that we’ve clearly come to a point where interest rates aren’t going to be in the news.” 

Soper said the realization that rate hikes will be stopping or slowing should draw what he called the “missing transactions” — those with the capacity to buy but who have remained on the sidelines — back into the market, though it may take some time. 


Those buyers, he said, have been reluctant because they understand the link between rising rates and prices, and “they don’t want to buy a house today that will be worth less tomorrow.” 

Having some price certainty will make it easier for them to enter the market, but they’ll still need to be comfortable knowing they are paying five or six per cent on their mortgages while others are locked in at two per cent.  

“There’s still many, many people out there with two per cent mortgage rates. Your sister or your cousin might have a two per cent mortgage rate but you’re going to have to pay five,” Soper said. “This will harm consumer confidence until the market has more time to adjust to it.” 

As a result, he said he saw a “muted recovery” in the cards for the spring. 

The pause also signals a light at the end of the tunnel for variable-rate holders, according to James Laird, Co-CEO of and president of mortgage lender CanWise, even if it means another dose of short-term pain. 


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Clearview Commercial Realty’s investment funds help expand portfolio



After 22 years in the Calgary office of a global commercial real estate firm, Steve Vesuwalla started his own company, Clearview Commercial Realty, in 2019. A year ago, he established Clearview Industrial Fund, with all capital raised though Alberta investors.

Its success has been remarkable, with the closing of the first three funds that brought Clearview a portfolio of 300,000 square feet, comprising a 260,000-square-foot building anchored by the north campus of CDI College and a 35,000-square-foot industrial building in South Foothills

The third fund launched in 2022 resulted in a residential project in partnership with NAI Advent.


Mission 19 is a luxury 67-unit apartment block that will welcome tenants this fall, designed by Gravity Architect and being built by Triumph Construction in the trendy Mission District at 320 19th Avenue S.W.

Last month, Vesuwalla embarked on a fourth — the Clearview Alberta Opportunity Fund — with a goal of raising a pool of equity that will allow his company to act quickly when commercial real estate opportunities arise.

“Successful real estate ventures result from being able to find appropriate investments and having the ability to purchase right away,” says Vesuwalla. “And cash is still king.”

Acumen Capital Partners handled the equity raise and the first round of financing closed last month. A second round is scheduled to close at the end of this month.

The first purchase — in cash — by the new fund is the former Economy Glass building at the corner of 17th Avenue and Centre Street S.W. in the Beltline district.

The 11,500-square-foot building on a .33-acre site has drive-in overhead/roll-up doors, existing office and retail showroom improvements, and highly usable and accessible lower level space.

Vesuwalla is working with a restaurant group and fitness operator to take over the spaces, but the location is ideal for future development as a multi-storey commercial-residential building. That will be planned on the completion of the extension of 17th Avenue across Macleod Trail, giving direct pedestrian and vehicular link access into the Stampede grounds, the BMO Convention Centre expansion and the Victoria Park/Stampede LRT station redevelopment.

No doubt that connectivity will invite further commercial, retail and entertainment-oriented development along 17th Avenue and in the immediate area.

Doug Johannson, executive vice-president at Clearview who joined the company in 2021, has also been busy completing some commercial real estate deals.

Explosive growth in development of commercial real estate in the Balzac area has continued with the sale of 33.85 acres on the south side of Highway 566.

Located between the successful developments of High Plains and Wagon Wheel industrial parks, it was sold by Johannson on behalf of the Abbotsford, B.C., owner to a local developer for $8.8 million.

He was also the broker for the sale of a 17-acre parcel in Frontier Park to Remington Development, and has an unconditional contract to close on the sale of a 43,500-square-foot building on Enterprise Way, between Stoney Trail and the eastern city limits.

Last year was a good one for Clearview and it has started 2023 full of confidence for even better results from commercial real estate transactions, as well as opportunities the new fund will bring.

Vesuwalla and Johannson continue to look for interesting value-added opportunities to increase Clearview’s rewarding portfolio.


President and CEO of Bow Valley College, Dr. Misheck Mwaba, has been appointed to the board of the Calgary Chamber of Commerce for a three-year term. “I look forward to working closely with the board on strategic initiatives to address the evolving needs of the Calgary business community,” says Mwaba. “I am acutely aware of the urgent need to develop and retain a world-class talented workforce, nurture a diversified economy and grow our digital ecosystem. Mwaba is a champion of Workforce Integrated Learning (WIL), re-skilling and up-skilling, and takes pride in liaising with Calgary businesses to understand their labour demands.

David Parker appears regularly in the Herald. Read online at He can be reached at 403-830-4622 or by email at



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