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
HAMILTON – It remains faint but Bo Levi Mitchell and the Hamilton Tiger-Cats still have a playoff pulse.
Mitchell threw two touchdown passes as Hamilton defeated the Ottawa Redblacks 37-21 in the CFL’s annual Hall of Fame game Saturday afternoon. The Ticats (4-9) earned a second straight win to move to within six points of the third-place Toronto Argonauts (7-6) in the East Division.
Hamilton visits Toronto on Friday night.
“Obviously they’re (wins) huge now,” Mitchell said. “We didn’t do ourselves any favours by getting into this position and not being able to really control our own destiny.
“But right now, we need certain people to win at certain times. Our job is to go out there and try to win the next five, then the next three after that.”
Mitchell finished 20-of-27 passing for 299 yards and an interception. He entered weekend action leading the CFL in passing yards (3,383) and TD strikes (21).
Greg Bell’s 15-yard TD run at 11:30 of the fourth and two-point convert put Hamilton up 36-21 after backup Jeremiah Masoli led Ottawa on two scoring drives. Following a 13-yard TD strike to Andre Miller at 2:53, Masoli found Dominique Rhymes on a 10-yard touchdown pass at 7:43 before Khalan Laborn’s two-point convert cut Hamilton’s lead to 29-21.
“When you’re scoring from (15) yards out on a run play, that makes offence easy,” Mitchell said. “It’s one of those things when you get down there as a quarterback, it takes you sometimes five, eight, 10 plays and now it’s ‘OK, now we have to create some stuff and find something.’
“When you hand the ball off and you’re scoring from (15) yards, it makes the offence really easy.”
Ottawa (8-4-1) would have clinched a playoff spot with a victory.
Ottawa committed six turnovers (three interceptions, two fumbles, once on downs) before an announced Tim Hortons Field gathering of 22,119. Lawrence Woods III also returned a punt 83 yards for a touchdown at 11:51 of the first quarter that put Hamilton ahead 10-3.
“You’ve got to bring your best every single week and this wasn’t our best, all of us, from coaches to the players,” said Ottawa head coach Bob Dyce. “If you don’t play great for four quarters, I don’t care who you’re playing you’re not going to have a successful day.
“We should’ve made the tackle (on Woods), we had him wrapped up it’s that simple. Even though we didn’t make the play on that, there should’ve been extra bodies there to clean it up when he did break the tackle.”
Hamilton also tied the season series with Ottawa 1-1. The teams meet again at TD Place on Oct. 25.
“If we didn’t turn it over today I would’ve said we played really well offensively and that to me is what the biggest difference is,” said Hamilton head coach Scott Milanovich. “Even the turnovers today (interception, fumble), at least they were in their end and we weren’t giving them a short field.
“The biggest play of the game was Woodsie’s return. It got us jump-started, gave us the lead and we were kind of off after that.”
Ottawa starter Dru Brown was 17-of-27 passing for 164 yards and an interception. Masoli entered late in the third and finished 13-of-19 passing for 183 yards with two TDs and two interceptions, but Dyce said Brown will start next weekend against Montreal (10-2-1), which earned a 19-19 tie Saturday night with Calgary (4-8-1).
The Canadian Football Hall of Fame’s ’24 class of S.J. Green, Chad Owens, Weston Dressler, Vince Goldsmith and Vince Coleman, along with builders Ray Jauch and Ed Laverty (posthumously), was honoured at halftime. All were enshrined Friday night.
Steven Dunbar Jr. and Ante Litre had Hamilton’s other touchdowns. Marc Liegghio kicked two field goals, three converts and two singles.
Ottawa’s Lewis Ward booted two field goals and a convert.
Mitchell culminated a five-play, 96-yard march with a 20-yard TD pass to Litre at 13:34 of the third. It followed Jonathan Moxey’s interception.
Liegghio’s single at 7:05 of the third put Hamilton up 22-6.
Mitchell’s 54-yard TD strike to Dunbar at 14:18 of the second staked Hamilton to its 21-6 halftime lead. The advantage was well-deserved as the Ticats had more first downs (12-six), net offensive yards (260-144) and scored on both offence and special teams.
Mitchell was 14-of-20 passing for 210 yards and a TD, but his interception cost Hamilton at least a field-goal attempt. Dunbar had five receptions for 113 yards and the touchdown.
Brown completed 13-of-21 passes for 127 yards.
Liegghio’s missed 47-yard attempt went for the single at 12:45 to put Hamilton ahead 14-6. It followed a Kiondre Smith catch that was ruled incomplete and at the very least cost the Ticats a first down that would’ve kept the drive alive.
Ward’s 30-yard kick at 9:15 had pulled Ottawa to within 13-6.
Liegghio’s 19-yard field goal at 5:13 pushed Hamilton’s lead to 13-3. It followed the defence stopping Ottawa’s Dustin Crum on third-and-one, giving the Ticats possession at the Redblacks 40.
Liegghio’s 47-yard field goal opened the scoring at 2:42 before Ward tied in with a 24-yard boot at 8:44.
UP NEXT
Redblacks: Host the Montreal Alouettes (10-2-1) next Saturday, Sept. 21.
Tiger-Cats: Visit the Toronto Argonauts (7-6) on Friday.
This report by The Canadian Press was first published Sept. 14, 2024.
TORONTO – Needing three points to keep their playoff push alive, Toronto FC’s Jonathan Osorio and Deandre Kerr stepped up with first-half goals against Austin FC on Saturday with goalkeeper Sean Johnson doing his bit at the other end.
A 76th-minute goal by Austin’s Owen Wolff made for a nervy ending but TFC hung on for a 2-1 win.
While Toronto (11-15-3) remains on the Major League Soccer playoff bubble in eighth place in the Eastern Conference (the eighth- and ninth-place teams in each conference square off in a wild-card playoff with the winner facing the top seed in the conference), other results went their way.
Seventh-place Charlotte, 10th-place Atlanta and 11th-place Philadelphia all lost while ninth-place D.C. United tied.
Toronto midfielder Alonso Coello called it “a game we had to win.”
“It’s a big win … To see that fight tonight was important,” added coach John Herdman.
Austin (9-12-7) came into the game in 11th place in the West, two points below ninth-place Minnesota. The Texas side has won just one of its last six league games (1-4-1).
Austin outshot Toronto 7-6 (6-2 edge in shots on target) in the first half but found itself trailing 2-0 at the break as Toronto took advantage of its chances and the visitors didn’t in their first-ever visit to BMO Field, before an announced crowd of 25,538.
Toronto had a dream start, catching Austin on the counterattack in the seventh minute. A sliding Austin player dispossessed an onrushing Kerr, who had been set free by a long ball from Coello, but the ball bounced to Osorio, who beat goalkeeper Brad Stuver with a rising shot.
It was the Toronto captain’s second goal of the season in league play and his 65th for TFC in all competitions. Only Sebastian Giovinco (83) and Jozy Altidore (79) scored more in Toronto colours.
TFC went ahead on another counterattack in the 30th minute after an Austin giveaway. Osorio found Richie Laryea outpacing his marker and the wingback unselfishly sent a perfect low cross across goal for Kerr to knock home for his third of the season.
Wolff, the son of Austin head coach Josh Wolff, made it interesting with his late strike. The 19-year-old U.S. youth international, controlling a long ball, beat defender Raoul Petretta and then waited out Johnson before slotting it home for his first of the season.
Toronto survived a nervy six minutes of stoppage time as Austin pressed for the equalizer. Austin outshot Toronto 14-9 (8-3 in shots on target) and had 52.5 per cent possession.
The win evened Toronto’s home record at 7-7-0, while Austin slipped to 3-8-3 on the road.
It was a costly evening for Austin with defender Brendan Hines-Ike, midfielder Jhojan Valencia and star attacker Sebastian Driussi allpicking up cautions to miss Wednesday’s game with Los Angeles FC due to yellow-card accumulation.
Toronto defender Shane O’Neill will miss Wednesday’s game against visiting Columbus for the same reason. Toronto could be short mid-week, too. The hope is veteran centre back Kevin Long, who missed Saturday’s game after tweaking his hamstring in training, will be good to go.
Toronto has five games remaining, including three more at home as it looks to return to the post-season for the first time since 2020 when it lost to Nashville after extra time at the first hurdle.
It is a challenging road.
TFC hosts Columbus, the New York Red Bulls and Inter Miami while playing away at the Colorado Rapids and Chicago Fire. All but Chicago are in playoff positions.
The only previous meeting between Toronto and Austin was in May 2023, when Zardes scored a 91st-minute winner to give Austin a 1-0 win over visiting Toronto, which was then mired at the bottom of the Eastern Conference. That loss prompted a post-game outburst from Italian star Federico Bernardeschi about TFC’s drab play.
Then-coach Bob Bradley benched Bernardeschi for the next game.
Current coach John Herdman made four changes to his starting 11 with Bernardeschi and Osorio returning from suspension and Coello and Kerr also slotting in. Coello, who had missed the last eight league games with a hamstring injury, was impressive in his 59-minute return.
Both Toronto and Austin suffered home losses last time out going into the international break. Toronto was beaten 3-1 by D.C. United while Austin lost 1-0 to Vancouver.
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This report by The Canadian Press was first published Sept. 14, 2024.
MONTREAL – CF Montreal is back in the win column after securing a 2-1 Major League Soccer win over Charlotte FC on Saturday night at Stade Saputo.
Montreal’s form had suffered of late, with just one win in MLS since July, but Laurent Courtois’ squad showed a level of poise and control over the tempo of the game that had not been seen since the beginning of the season.
“What we’ve changed in the last few weeks or months in terms of our methodology or coaching, is nothing. We did the exact thing, We had the exact same words, and we expressed them the exact same way,” said Courtois. “Today, everything just clicked.”
Caden Clark scored for the first time as a Montreal (7-12-9) player in the 23rd minute, in addition to Bryce Duke’s goal three minutes later that ended up being the winner, while Tim Ream found the back of the net for Charlotte (10-10-8).
Montreal had the first major scoring chance of the match after 15 minutes of play. With a free kick roughly 25 metres away from goal, Gabriele Corbo sent a near-perfect shot smashing off the crossbar.
Montreal would continue to dictate the tempo in the opening phase, finding first blood just seven minutes later.
Following a phenomenal triple-save from Charlotte goalkeeper Kristijan Kahlina, the ball fell to Clark who volleyed the ball into the wide-open net, picking up his first goal for the club.
“I think you don’t lose the feeling (of scoring), everything happens for a reason, you just can’t lose yourself in the chaos,” said Clark, who had missed a full season due to injury and was briefly without a club, but was grateful for Courtois’ confidence in him.
“(To have a coach’s confidence) is huge and is something I’ve had both ends of so you just can’t take advantage of that in the wrong way. I’m going to keep my discipline with the game plan and keep my head right.”
With momentum completely on their side, the home side doubled the lead just three minutes later. Montreal continued to build up play on the left flank and found a streaking Raheem Edwards in behind the defence who cut the ball back to Duke, sending the Stade Saputo crowd into a frenzy.
Just after the half-hour mark, Charlotte pulled one back through a set piece — something Montreal has struggled defending all season — as Ream rose above everyone at the back post to score his first with his new club.
The second half began in a similar fashion to the end of the first, with Charlotte pressing high up the pitch and forcing several turnovers in dangerous areas. After surviving the pressure, Montreal began to regain control of the game near the hour mark, enjoying the lion’s share of the possession while Charlotte looked to hit back on the counterattack.
“I think when we conceded that goal we were like ‘here we go again.’ 2-1 is a tough lead before halftime … and at the beginning of the half we kind of shot ourselves in the foot and they pressed a bit more, they moved a bit more forward and that opened some gaps,” said captain Samuel Piette.
“I was happy with that, it shows character. At the end of the day, we just wanted the three points and that’s what we got.”
As the game progressed, Charlotte pushed harder to find an equalizer but to no avail. With only one shot on target conceded, the second-worst defence in the league put up an impressive front and confidently rebuffed every single Charlotte attack.
“I’m a big fan of the back five’s performance in their discipline, competitiveness, and synchronization with balls in behind,” said Courtois.
“We can’t explain sometimes in a game it’s not there, they’re capable and today they showed it. Let’s see tomorrow.”
UP NEXT
Both teams are back in action on Sept. 18 away from home as Montreal will look to avenge a 5-0 rout against the New England Revolution while Charlotte visits Orlando City SC.
This report by The Canadian Press was first published Sept. 14, 2024.
